Friday, September 22, 2023
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British oil refineries blockaded as energy costs spiral

Soaring energy costs are hitting U.K. households hard, leaving the government scrambling to develop an energy security strategy. But plans to expand oil and gas extraction are complicated by environmental activists, who are starting to target the country's fossil fuel infrastructure.

LONDON (CN) — Environmental protesters have begun blockades of 10 major oil refineries across England, causing substantial disruption to the industry’s operations.

Campaign group Just Stop Oil began the demonstrations early on Friday morning. Their stated intention is to immobilize the U.K.’s fossil fuel infrastructure, signaling an escalation in tactics from activists associated with the protest group Extinction Rebellion.

Four fuel terminals have been forced to suspend all operations after protesters blocked access roads, climbed on top of fuel tankers, and obstructed other strategic locations.

Their campaign begins on a day when concerns about energy are at the forefront of conversations across Britain. Overnight, gas and electricity prices more than doubled for U.K. consumers, with the average British household now receiving energy bills 54% higher than the previous month. Alongside increases in national insurance – a tax on wages – and the highest rates of inflation for more than 30 years, a burgeoning cost of living crisis is quickly consuming British politics.

The Resolution Foundation estimate the energy price changes will immediately plunge an additional 2.5 million people into “fuel stress” – when consumers spend more than 10% of their income on energy costs alone – bringing the total number of people most severely affected to 5 million people, or 8% of the population. The same research has warned that further increases expected in autumn could lead to widespread poverty emerging in certain parts of the country, estimating that more than 40% of households in North East England would struggle to pay their bills.

The overnight increase has been triggered by the regulator Ofgem lifting the price cap on energy bills for the new financial year, which begins on April 1., On Thursday, the websites of all major energy providers in Britain crashed as consumers rushed to register meter readings before the price hikes kicked in.

Last week, Chancellor Rishi Sunak, the U.K.’s finance minister, announced a range of measures designed to offset the impact of the price rises, including cuts on fuel duties, government loans, and a rising minimum wage.

However, the chancellor’s response to the crisis has been criticized as indifferent and out of touch, with the measures announced accused of having a negligible effect on household budgets.

The Labour Party’s Shadow Chancellor, Rachel Reeves, chastised Sunak, saying: “The chancellor could have put a windfall tax on oil and gas producers to provide real support to households, but he didn’t … he could have properly scrapped his national insurance hike, but he didn’t. How many more children and pensioners will drift into poverty because of the choices of this government?”

British Prime Minister Rishi Sunak holds a press conference in the Downing Street briefing room in London. (Justin Tallis/Pool via AP, File)

The opposition party’s deputy leader, Angela Rayner, was similarly critical.

“The chancellor hasn’t got a clue. He lives in another world,” she said. “He’s left households and businesses to fend for themselves in the middle of a devastating cost of living crisis. The Office for Budget Responsibility knows this is the biggest hit to household incomes on record.”

Over the past week, Sunak’s approval ratings have plummeted, denting his widely acknowledged prime ministerial ambitions. Increased scrutiny of the chancellor’s personal finances has led to accusations that he is unable to grasp the severity of the crisis. Sunak is reported to be the U.K.’s richest member of Parliament, with his personal wealth exceeding 200 million pounds ($262 million), while his billionaire father-in-law is the sixth richest person in India.

The energy price rises have been triggered by a steep increase in global wholesale gas prices. The U.K. has become particularly reliant on gas after scaling down its North Sea oil operations during the 2000s. However, the government is now seeking to reduce reliance on gas imports as a result of the war in Ukraine. An emergency energy security review due to be published next week is expected to announce a range of new licenses for oil and gas extraction operations in the U.K.


But the expected announcement has provoked the ire of environmental campaigners, who argue that ramping up fossil fuel production will have a devastating impact on the U.K.’s climate commitments. It is in this context that blockades of oil refineries have begun.

A statement published on Friday by Just Stop Oil read: “Right now ordinary people are being made to pay, while the government wastes 230 million pounds a week subsidizing the oil industry and energy companies make huge profits. There must be no more increases in fuel or heating costs. Fossil fuel companies and the richest must pay. The cost of living crisis is not going to end, but we can insulate ourselves from higher fuel prices by getting off oil and gas.”

“The Just Stop Oil Coalition is calling on all of those whose futures are being destroyed, who are facing poverty and who are outraged at the prospect of continuing our dependence on fossil fuels to stand up and take action," the group said.

The group cites Fatih Birol, director of the International Energy Agency, who has repeatedly said that global climate commitments and new investments in oil and gas extraction are fundamentally incompatible. Current climate commitments are already widely regarded as inadequate to prevent global warming of more than 2 degrees Celsius above pre-industrial levels, the point at which climate breakdown becomes essentially irreversible.

The activists' key demand is that the government “make a statement that it will immediately halt all future licensing and consents for the exploration, development and production of fossil fuels in the U.K.”

The British government has had a number of run-ins with environmental activist groups in recent years. In 2019 Extinction Rebellion shut down much of central London for weeks on end to demand action on climate change. And in 2021 the group Insulate Britain repeatedly blocked the U.K.’s motorway network to highlight the costs of the country’s poorly insulated housing stock. In response to the actions, the government have introduced sweeping and controversial legislation seeking to limit the right to protest, but the bill has stalled in Parliament due to concerns over the infringement of civil liberties.

The emergence of Just Stop Oil represents an escalation of tactics, with more than 1,000 protesters seeking to cause maximum, sustained and simultaneous disruption to fossil fuel operations. Whereas previous actions have sought to draw public attention to the crisis, the new approach seeks to make fossil fuel operations more complicated, expensive and thus less attractive to investors.

The tactics are similar to those deployed by anti-fracking protesters over the last decade. The high policing costs required to restrict access to shale gas extraction sites significantly contributed to making the industry unviable in the U.K..

The push for new oil and gas extraction is driven in part by disagreements in government over the country's future energy mix. Conservative members of Parliament have privately expressed reservations about plans to lift a ban on onshore wind power projects, the cheapest form of British energy generation, on the grounds that the turbines are aesthetically unappealing. The chancellor is also reported to be opposed to large-scale government investment in nuclear power, due to high costs. The threat of sustained disruption to fossil fuel operations may well further restrict the government's room for movement. The energy security review has been repeatedly delayed as high-level negotiations between government ministers continue.

But while the review is focused on creating a long-term energy strategy, it will do little to relieve price hikes facing consumers today. And as household begin to receive their new bills over the coming days, the increasing public backlash is likely to raise the political costs of government inaction.

Categories / Consumers, Energy, Environment, Government, International

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