Energy Source will now be taking its annual Christmas break. We will be away from today (December 23rd) until January 4th. That is unless something major happens in the energy industry, in which case I promise to return promptly to my keyboard and keep you all up to date.
In the meantime, happy holidays to all our readers, and see you in the new year.
The civil suit against BP brought by the US government on Wednesday had been inevitable since we first found out that thousands of barrels of oil were spilling into the Gulf of Mexico. The timing of Wednesday’s announcement, mandated by the judge at the New Orleans court where the trial will be held, was the only surprise. It perhaps did not send the best message about the business-friendly nature of the administration, on a day when President Obama was courting many of America’s top CEOs.
The share price reaction was modest, reflecting the fact that while the headlines are terrible for sentiment, investors always knew this day would come. The news looks bad for BP, but shareholders can still hope for better, as the Lex column points out.
Nevertheless, the Department of Justice’s action is a salutary reminder that, eight months after the fatal accident on the Deepwater Horizon, and three months after the ill-fated Macondo well was sealed for good, BP is still not even close to finding out exactly how much the disaster will cost.
The UK government’s cap on non-EU migrants has won fewer supporters than ministers hoped. Initially thought to be an obvious crowd-pleaser, it has been met with a torrent of criticism from businesses of all sizes and in all sectors, not to mention cabinet ministers themselves.
One of the things that the oil and gas was most concerned about was the inclusion of intra-company transfers (ICTs) in the cap. This would effectively limit the ability of companies to import their own talent from elsewhere into the UK.
In February, a group of business leaders (including Richard Branson) came together to issue the government a warning: we’ve had the credit crisis, the next crisis will be a peak oil crisis.
Their message to government was to stop listening to the over-exuberance of oil companies who promised great things from their upstream operations and start thinking seriously about how to move away from the UK’s dependence on oil.
Now they have repeated that call, with an additional warning: Macondo has made the situation even more pressing.
George Osborne did not spend much time talking about the energy industry today, but the spending review contained some important new figures and policies. Here, then is the spending review – as far as it effects the energy industry – in numbers.
The amount to be spent on the UK’s CCS demonstration.
To be spent on developing new green technology, including offshore wind and developing port infrastructure.
To be spent on funding the green investment bank.
Average yearly fall in the DECC budget.
Average yearly fall in the Defra budget.
The amount being spent on the renewable heat incentive over the next four years.
The fall in feed-in tariffs planned for 2012 – the same as planned by the previous government.