“When the foundations are extractive, everything built on top is expensive.” Govt economic policy has to change and change rapidly. Any review on energy has to consider public ownership as an option. Here’s why: This isn’t just about a bad year or a temporary spike. It’s not something we fix with another sticking plaster or short term rebate. This is structural. For 40 yrs we’ve treated the basics of our economy as assets to sweat, not foundations to strengthen. Energy, water, transport, housing, even parts of our food system have been organised around extraction first, production second. When the foundations are extractive, everything built on top is expensive. High energy prices don’t just hit families trying to heat their homes. They hit factories, pubs, farms, small manufacturers. They feed straight into food prices, rents and transport costs. That’s why the cost of living crisis & the cost of doing business crisis are the same crisis. You can’t build a serious manufacturing base on top of an energy system designed to reward volatility. You can’t have food security when water companies are loaded with debt and paying out dividends. You can’t grow regional industry when transport is fragmented and overpriced. You can’t ask small firms to invest when commercial rents are inflated by land speculation. Tinkering won’t cut it. Price caps without structural reform just socialise the risk and privatise the reward. Short term subsidies ease the pain but leave the model untouched. Industrial strategy without control over energy costs is industrial strategy with one hand tied behind its back. If we’re serious about growth and renewal, we’ve got to talk about democratic control of the basics. Not control for its own sake. Control that lowers the cost of capital. Control that aligns investment with long term public need. Control that treats water, energy, transport, housing and food as the infrastructure of prosperity, not chips in a global casino. A Productive State doesn’t micromanage everything. It does something more important. It shapes the rules, owns or co-owns the natural monopolies, and makes sure essential services run at cost plus resilience, not cost plus maximum extraction. Right now we’ve got manufacturers paying some of the highest industrial energy prices in Europe. Households squeezed. Government spending billions managing the fallout instead of fixing the cause. Every time we patch instead of reform, we lock in higher structural costs. For families. For firms. For the state. The business groups are right to worry. But we won’t fix this by begging for another relief scheme. We fix it by rebuilding the foundations. Energy priced for production, not speculation. Water run for resilience and public good, not dividend flows. Transport integrated to support growth. Housing treated as infrastructure, not a tax shelter. Food supply anchored in security, not fragility. Until the basics are under far stronger democratic guidance, the cycle carries on. Higher bills. Higher business costs. Lower investment. Lower growth. That isn’t fate. It’s a policy choice. And we can choose differently.

In Q2, 2020, a client bought a refinery. JV with one of the best energy operators of all time. For obvious reasons, in Q2, 2020 nobody wanted anything to do with energy, or airports (the client bought an airport, too). Fast forward to October 2026. The client expects a dividend in 2026 from that one refinery ~=80% of their 2020 cost base. Not bad. So here’s the test: what asset or assets that people hate today might (we can only imagine) generate similar real cash returns five or six years hence? 🧐

Trump is making tariff changes to shore up a Senate race -- Maine Senator Susan Collins, among the most endangered GOP senators in this cycle, announces that nine categories of products will be exempted from Trump's tariffs on Canada.

This will be difficult to read for some, but given the geopolitical situation we're in, the government's decision to approve drilling at the Jackdaw gas field is the right one. Here's why ⬇️ Wholesale gas prices have reached a four-year high. The ongoing conflict in the Middle East has shown again how quickly global supply can be disrupted, and how exposed we are when we depend on other people's gas. After Russia invaded Ukraine, it was families here at home who felt the cost. With the Strait of Hormuz blocked, the pressure on global energy supplies is only getting worse. We'll need gas for years yet. No economist, minister or energy specialist will deny that. The climate concerns are real too, and I agree that new fields cannot become an excuse to slow down on renewable energy. But a credible transition needs a secure pathway to get there. *Security of supply is not the opposite of net zero.* And here's the environmental contradiction: gas that is liquefied, shipped across the sea and then turned back into gas at home has around *three times the production and transport emissions of gas from the North Sea. An insane practice!* The choice being made now, and it's the right choice, is whether more of the gas we need is produced here, by British workers on proper wages and with lower production emissions than imported LNG, or shipped in from overseas. Leaving our own gas in the ground while importing gas doesn't help the planet. It risks simply moving the jobs, the tax revenue and the emissions somewhere else. 🙄 This is a Labour argument. Our movement was built by people who did the hard graft that kept this country going. We often criticise Thatcher for destroying the mining and steel industries. We need to be careful not to do the same to a critical industry in the midst of a dangerous geopolitical moment. I know what the North Sea means to the workers and families who have built their lives on this industry. In my view, a proper transition away from oil and gas means the jobs of tomorrow should arrive before the jobs of today disappear. It also means being realistic about the speed of transition and making sure the skills built in offshore oil and gas are carried over into renewables, rather than written off. This must be done carefully, balancing energy security with the development of alternative sources of energy. In the more dangerous world in which we live today, *energy security is national security.* Diversifying our energy supply builds resilience, reduces our vulnerability and makes us more independent. Today's decision recognises that.

FOOL BRITANNIA by @EdConwaySky While many countries face higher energy costs due to the events in the Middle East and Russia, few have seen quite as big a spike as Britain has. Industrial power costs are comfortably higher than in most developed nations, with domestic costs not far behind. To some extent, this is a function of bad luck and geopolitics. Britain is particularly dependent on natural gas to provide the critical baseload power for its electricity, not to mention much of its domestic heating. But higher energy costs are also the product of policy. Britain pushed faster and further towards net zero (the goal of diminishing carbon emissions to close to nothing in net terms) than most of its peers. The ambition, held by Labour and Conservative governments, was that the UK should be the global leader in decarbonisation – the flag-bearer for net zero. In one respect, the enterprise was a stunning success – Britain is one of the fastest-decarbonising major economies in the world. The main catch in – and the cardinal sin of – the make-things-cheap economy is how it affects energy bills. For all that Boris Johnson and Ed Miliband insisted (and as far as I can tell, sincerely believed) that renewables would mean lower costs, the opposite has happened. Unlike solar power, the cost of which fell precipitously as the Chinese mastered the mass production of arrays, wind power has remained comparatively expensive. And so Britain’s ambitious offshore wind programme happened largely thanks to a complex web of subsidies and price guarantees. Those interventions will lock in higher power costs in this country for years. There is a point – most likely a decade and a half in the future – at which the savings from net zero (less spent on gas and fuels) should outweigh the costs of building all the necessary infrastructure. But for the time being, the policy is expensive – nearly £30bn a year for the next five years, which is the equivalent of an extra 5p on the basic rate of income tax. One of the main reasons net zero is becoming so controversial (and will likely get more controversial) is that the majority of those costs end up on consumer bills. The other problem is that much of this decarbonisation was achieved through deindustrialisation. In the face of higher energy costs and rising environmental taxes, many manufacturers relocated overseas. Indeed, more than half of Britain’s carbon footprint is now accounted for by imported goods. Paradoxically, the more steel mills and chemicals plants shut down, the better the UK’s environmental credentials, since net zero plans ignore the embedded carbon in our imports and focus solely on what is puffed out of domestic flues and chimneys. Cover art by Doug Chayka

Remarkable criticism of Treasury Sec Scott Bessent by his former boss, Stan Druckenmiller, esp this: "Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests." wsj.com/opinion/let-the-bond…

Misconception 3 is that more UK oil/gas output would mean lower UK energy costs. While it might bring them down ever so slightly the difference would be so small most people would be unlikely to notice it. Unless, that is, there was some mammoth discovery...