And former Tory leader Sir Iain Duncan Smith also fears the consequences of Britain’s dependence on Beijing for its nuclear building programme, solar power, wind turbines and battery imports. Sir Iain was speaking at the end of a week in which the benchmark European gas price is up more than 350 percent this year, trading above £22.74 per million British thermal units (mmBtu) on Wednesday, although down from last week’s spike above £38.15.
Citi bank raised its forecast for European and Asian benchmark gas prices for the fourth quarter by about £2.29, saying European prices could average £22.67/mmBtu.
Sir Iain said Britain by the mid-2000s, Britain had gone from being a net energy exporter to being a net importer, as it is today.
The Tory MP for Chingford suggested several reasons for this, including a “rush to decarbonise” and a failure to anticipate the ongoing need for fossil fuel reserves typified by a failure to approve licences for development of the Jackdaw field, a gas/condensate project in the North Sea.
He said: “This failure to grant new licences combined with our dependence on oil imported from unreliable regimes has made us more vulnerable to price spikes, particularly when at the same time we have decommissioned lots of our storage facilities.
“It makes you wonder who has been doing the vital strategic thinking, if any has indeed been done.”
Speaking just weeks before the start of COP26 in Glasgow, Mr Duncan Smith said the ambition to prioritise renewable energy was a “noble objective”.
“And, most worryingly of all, that vulnerability plays into China’s hands.”
He added: “Already, we are dependent on China for our new nuclear building programme and much of our batteries, wind turbines and solar energy.
“And, even when we get close to net zero, energy spikes won’t go away.
“Market volatility will move from fossil fuel to the demand for rare earth materials – the lion’s share of which are owned and produced by China.”
China’s “rapacious” demand for gas and coal was driving the current energy spike, Sir Iain pointed out, with Beijing having ordered state-owned energy companies to “to do whatever it takes” to secure fuel supplies.
In consequence, added pressure was being put on the price of gas paid by UK energy suppliers.
Sir Iain continued: “It is peculiar that we carry on being so dependent on a country that – amongst other nightmarish behaviour – regularly trashes the global trading rules.
“Surely it is time we set out to cut our dependence on deeply unreliable China, a country which clearly has no intention of meeting even their own weak obligations concerning net zero.”
What was required now was some strategic thinking about the UK’s energy requirements, Sir Iain suggested.
He said: “Even as we pursue net zero, our energy policy must remain balanced, affordable and most of all, secure.”