My feelings about Brexit are obvious, but putting them aside, consider what it may mean for UK energy in general and onshore natural gas in particular.
- The essential rationale for UK onshore gas remains. The North Sea is declining fast and the only alternatives will be imports. Both Norwegian and LNG have links to oil prices and will get more expensive.
- The carbon case for UK onshore gas is as strong as ever. If it’s an error to export lost tax revenue, it’s insanity to import high carbon gas instead of intrinsically lower domestic production.Thus, on rational terms, UK onshore investment would seem rational.
- UK investments, in any field, couldn’t previously depend on productivity, a highly skilled workforce or good infrastructure. They depended on a lack of risk. Enough said.