Britain is about to miss out on an energy revolution
For the second time round, it’s “America First” – and nowhere is this more apparent than energy policy.
When it comes to the big economic decisions, no one is certain about what Donald Trump will actually do when he’s back in the Oval Office. At the heart of all the speculation are his real intentions for tariffs, which he says will hit Canada, Mexico and China on “day one” of his second term. This is a seemingly unambiguous statement – but if these threats are really an attempt at negotiation, as those close to Team Trump suggest, it seems possible that something could still give.
That’s not the case for energy. There is no doubt that Trump is preparing to kickstart, again, an energy revolution across the United States: one that is designed to take supply to new heights and to bring costs down as much as possible.
It was one of the biggest talking points in the Trump campaign. Inflation, immigration and fracking were held together by the common thread of exclusively looking out for what Trump would consider “American interests”.
At rally after rally, Trump would pull up his video of Kamala Harris flip-flopping on her fracking position, with numerous clips jumping from one extreme – banning – to another – in support of the policy. It was always a powerful moment, as the video conveyed what Trump never managed to point out during their September debate: that it wasn’t so long ago that Harris held very progressive views on energy policy (and health, and tax, the list goes on), and those views were out of line with the average American voter.
Months out from election day, questions grew louder about whether Trump had misjudged the appetite for energy security in swing states like Pennsylvania, where fracking was taking place. The answer was a resounding no. Trump won the state decisively, and did so on a clearly-stated, pro-fracking agenda. The memory of lower prices – especially at the petrol station – were not forgotten by voters during the four years of President Joe Biden’s term.
Now it’s “frack, frack, frack”, or “drill, baby drill” depending on which Trump term you prefer. The president-elect has named the oil industry tycoon and fracking advocate Chris Wright as his nominee for the job of energy secretary, on the clear instruction to boost oil and gas supplies. There is unlikely to be much discussion of trade-offs in these meetings: Wright has previously rejected the idea of an “energy transition” and also rejects phrases like “climate crisis”.
Meanwhile Trump’s pick for treasury secretary also suggests a serious ramp-up in energy production. Scott Bessent may be Wall Street’s pick for the job (again raising questions about how radical Trump will be on tariffs), but he is also of the opinion that energy production is one of the three key factors to guarantee economic success. Part of his “3-3-3” strategy is for the US to produce so much energy supply it amounts to 3m barrels of oil a day. For Bessent, the type of energy matters less, so long as the turnout is spectacular – and costs are coming down.
Plenty of Trump’s agenda will horrify European leaders – especially when it comes to his defiance of international climate agreements and cooperation. But those leaders will also be dealing with another kind of horror this winter, when people’s energy bills land and outrage ensues.
The Labour Party is going to be navigating treacherous waters: having abolished the winter fuel allowance – not just for the wealthy, but for pensioners who will be genuinely struggling to pay their bills throughout the winter – any tragic incident involving someone lacking the payment is going to become a politicised matter.
Furthermore, while it’s a relief we’re past the stage of pretending GB Energy is going to reduce bills by £300 (the investment vehicle spends taxpayer money on green energy projects, it does not subsidise bills), the party is going to have to explain why – despite promising a reduction in costs – bills will be increasing this January by an average of £21 per household, as Ofgem raises the energy price cap.
Fluctuations are to be expected, but the further the US goes to secure energy independence and to bring costs down, the more the UK will stick out from the pack, with the highest electricity prices internationally.
This is not only untenable for people’s budgeting. It makes it nearly impossible to muster up any serious agenda to kickstart the economy.
To grow requires energy. To build anything, to innovate, to improve travel or increase efficiency – this all requires energy.
The more expensive that energy is, the more impossible it becomes to break out of the stagnant rut that has plagued Britain for years now. Without bigger supplies of cheaper energy, all the other things Britons report to want – more housing, better transport, improved public services – are much, much harder to obtain.
The UK doesn’t need to go full Trump to boost its resources and get better value for money. Simply a change in attitude could go a long way, as Nimby-style resistance to any new form of supply – whether that be fracking, wind farms, nuclear or solar – is one of the biggest hurdles standing in the way of increasing UK energy supply.
On this point, the American attitude towards energy stands in stark contrast to Britain’s. The results will, too.