Money Lane 1180

Breaking news over the weekend in the Sunday papers – the UK’s going to let ordinary citizens in fracking areas reap a share of the proceeds.

It happens in the US, where there’s been a massive energy and economic revival thanks to shale.  Why shouldn’t it happen here? Families could be in line for tens of thousands of pounds.

There’s potentially hundreds of trillions of cubic feet of gas, and hundreds of billions of barrels of oil, sitting right under the UK.  The country desperately needs an energy bonanza and to stand on her own two feet economically. Mark my word, a country without energy security will eventually be another’s slave.

In the almighty United States of America, a man owns not only his castle, he owns his land and what’s underneath it. In the UK, he doesn’t – it’s the government’s.

This move by Mrs May is great for UK citizens.  People are already asking me if I can find oil under their back yard!

Critics like Greenpeace are calling the windfall idea a ‘bribe’.  Poppycock!  Anybody who thinks sharing the proceeds of economic growth with ordinary people is a bad thing needs to see a head doctor.

I predict the PM’s initiative will galvanise local communities against the unwashed NIMBYS who skulk around any site trying to develop hydrocarbons. Most of these so called protestors don’t even live or work around the protest sites. Shame on them. I think there “May” be a serious shock coming their way soon.

This initiative will give power back to the people. And put real “wedge” in their back pockets. I have been advocating some sort of royalty for locals for a while. Give the landowner a good financial inventive, it’s the right thing to do, and increase the value of his or her land, not decrease it.

The Government also urgently needs to fast track the bureaucratic processes so the oil and gas guys can get on with it. Five to eight years to get permission to drill an exploration well in the UK is utter lunacy. You can’t run a business let alone a country like that.  In the US some states grant approvals within a month. That’s how to create a real onshore domestic oil and gas business.

So, as Brits all head off on their summer holidays, still coming to terms with Brexit, and a new Prime Minister, this is more evidence that Mrs May is really a radical.

In fact, I reckon she might even give Mrs Thatcher a run for her money.  This lady has balls.

Mrs May’s thinking is right up my street.  I was never convinced that Dave and George’s Eton chumocracy grasped how the economy really worked. Privilege and opportunity doesn’t necessarily produce grafters.

This isn’t the first sign that Mrs May is gearing up for a quiet revolution.

In her first statement as PM last month she set out her agenda – standing up for the ordinary people not just the privileged:

“The Government I lead will be driven not by the interests of the privileged few, but by yours. We will do everything we can to give you more control over your lives. When we take the big calls, we’ll think not of the powerful but you.”

The establishment of course hates this sort of power-to-the-people thinking.  It challenges their shaky grip on the levers of the economy and they don’t like that.  And we’re talking not just the money men in the city, and their politician chums.  We’re talking NGOs like Greenpeace, the newspapers, and most of the Prosecco-swilling, Guardian-reading liberal urban elite.

Not that I’ve got any particular gripe with the GuardianSimon Jenkins’ column is always worth reading.  He’s another person with smart radical ideas who’s not afraid to say it as it is.  Only last week he called for cash to be printed and given directly to households – the economy is in danger of flat-lining, and injecting money into the banks and dropping interest rates isn’t working.

Back to energy – I’ll put money on Mrs May showing her mettle and putting the mockers on Hinckley Point.  It’s a bad deal, full stop.  Don’t be fooled by the spin and bullshit about China influence or French technology, that’s not the issue.  The point is it’s a bad deal. Not just bad, but REALLY bad.  In a low growth, low interest rate world a £92.50 megawatt hour strike price is bonkers.

And if the Chinese and French get their knickers in a twist she’ll just have to send Boris in to schmooze them.  It’ll blow over.

If the UK’s going to go through an energy revolution the money’s going to need to be invested wisely and invested now.

The economy needs a boost, for sure.  But the proceeds mustn’t be squandered either.  There’s absolutely no reason the UK cannot create a serious conventional oil and shale gas energy boom and invest much of the proceeds in a rainy day fund.  Abu Dhabi’s done it.  Norway’s done it.  Some serious investment to help smooth out the economic cycle.

I’ve got lots of oil wells to drill in the UK’s Weald Basin. But we need to do it now not least because North Sea oil is coming to the end of its useful life.

Long term thinking.  That’s what this is all about.  Mrs May is starting to look like she’s really getting into her stride – bold thinking, power to the people, sound economic sense, and running this country for the benefit of generations to come.   Good on her.

 

 

 

Written by David Lenigas