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UK Foreign Secretary Liz Truss looks set to be elected as the new leader of the Conservative party and succeed Boris Johnson as prime minister in the midst of the worst energy crisis since the 1970s.
Results are expected to be announced on Monday, but opinion polls indicate that Truss is running well ahead of her rival, former chancellor Rishi Sunak.
At a final campaign event this week, Truss ruled out imposing another windfall tax on oil and gas companies to fund support for vulnerable consumers and struggling businesses, but Sunak said the windfall tax option was still on the table.
Truss also said there would be no rationing of energy in the UK this winter, but did not provide details to back up that assertion. Sunak said rationing could not be ruled out.
Oil and Gas
Up to 130 new licenses for oil and gas exploration could be made available this autumn if Truss wins the leadership race.
Sunak also supports the issuing of new exploration licenses as well as incentives for upstream oil and gas investment.
Industry lobby group Offshore Energies UK said this week that the UK will become almost fully dependent on imported oil and gas within the next 15 years, unless the government grants new licenses and takes steps to encourage upstream investment.
Official UK energy statistics show that the country’s primary oil production fell to a seven-year low of 41 million tons (about 820,000 barrels per day) in 2021.
Gross natural gas production sank to a record low of 364 terawatt-hours (37.3 billion cubic meters).
Doug Parr, chief scientist at Greenpeace said it could take a quarter of a century to develop significant new oil and gas resources, arguing that it would “have no real impact on energy bills, yet still fuel the climate crisis.”
Fracking, Renewables and Nuclear
Truss has said she supports hydraulic fracturing (fracking) to facilitate extraction of gas from shale formations in communities “where people want it to happen.” Sunak has taken a similar position on that issue.
The UK government placed fracking under a moratorium in 2019 but it appeared to open the door to the process again earlier this year when it commissioned a scientific review of shale gas extraction.
Very few countries have significant oil and gas production from fracked shale formations. The exceptions include the US, China and Argentina.
Both candidates for the Conservative party leadership support a massive expansion of offshore wind and nuclear power in the UK.
Both have said they would be willing to let the government underwrite some of the costs of developing new nuclear plants and both have also spoken favorably about the deployment of small modular reactors in the UK.
Lukewarm About Net Zero
Truss and Sunak are at best lukewarm supporters of the UK’s goal of achieving net zero greenhouse gas emissions by 2050.
Truss said she would seek to deliver net zero by 2050 without reducing household incomes or adversely affecting businesses, but she has not provided details about how that would be achieved.
Sunak says he would give greater priority to achieving UK “energy sovereignty” by 2045 than to the 2050 net zero target.
Truss is likely to promote Business and Energy Secretary Kwasi Kwarteng to the position of chancellor, so his old job would become vacant.
Sunak has said he would reestablish a standalone department of energy and set up a UK energy security council.
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