Billionaire investor threatens

Billionaire investor threatens to pull out of UK amid global outcry at new oil rush - ChiefIdea

By Joanne Cassar / 02. Aug 2023

The billionaire Australian mining tycoon and investor Andrew Forrest has led international condemnation of the UK’s new oil rush, saying he would pull his major investment from the country if the prime minister pursued “clickbait” fossil fuel policies.

The iron ore magnate, who also runs the Minderoo Foundation philanthropic organisation, threatened to move his investments out of the UK over Rishi Sunak’s swivel towards new oil and gas drilling.

“I am a major investor here,” Forrest told Bloomberg News on a visit to London. “If I see this country steering itself over a cliff backing fossil fuel, I am going to start pulling out.

I will push my investments over to North America … I must invest where I know I have proper leadership, not leadership which is on a clickbait cycle.”

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Forrest, one of the wealthiest people in Australia, is a major proponent of green hydrogen where the power is produced from renewables.

His Fortescue Future Industries investment vehicle has a cash mountain of billions of dollars and has signed a major deal with JCB, as well as building a factory to produce batteries and electric powertrains for heavy industry vehicles and trains in Oxfordshire.

The prime minister’s announcement that more than 100 new oil and gas drilling licences would be granted for the North Sea in the autumn has sparked condemnation from climate scientists, energy experts and some within his own party.

The push for oil and gas is in direct conflict with international experts including those at the International Energy Agency and the International Institute for Sustainable Development who say oil and gas exploration must stop if the world is to stay within safe limits of global heating and meet the goal of net zero emissions by 2050.

The return to fossil fuel drilling puts the UK at odds with a string of European countries including Ireland, Denmark and Spain, who have already announced bans on new oil and gas exploration in order to tackle climate breakdown.

Michael Bloss, a Green MEP from Germany, said the UK had lost all credibility. “The UK has lost its leadership on this issue.

The International Energy Agency said in 2021 that there must not be new fossil fuel exploration in order to try and keep [the goal of limiting heating to 1.5C above pre-industrial levels] alive.”

In the US, Paul Bledsoe, an ally of President Joe Biden and a former climate adviser to Bill Clinton, said the Conservative government was increasingly seen in the US as backsliding on climate commitments, with the North Sea oil drilling scheme just the latest example.

“Far-right Tories are beginning to resemble US Republicans, a development that can only undermine UK credibility internationally and improve Labour party prospects,” said Bledsoe, a strategic adviser at the Progressive Policy Institute in Washington DC.

Nate Hultman, a former senior adviser to John Kerry, said investing in new fossil fuel infrastructure was a bad investment for the climate, and in a world seeking to decarbonise rapidly it was a risky financial bet.

“When a country increases its domestic fossil fuel infrastructure, it can further embed the economic interests and political incentives of the fossil fuel industry,” said Hultman.

“Instead, countries can invest in new economic activities that will also provide what the planet needs to rapidly phase down fossil fuels over the next two decades.

Low-cost, low-carbon technologies already exist that can supplant fossil fuels for almost all domestic demand in most sectors. These should always be the core of any national strategy to reach net zero.”c

In a high-profile policy announcement after flying into Scotland on Monday, Sunak claimed granting more than 100 new oil and gas drilling licences would drive down energy costs and help the UK lead the way on net zero.

His junior energy minister Andrew Bowie said the policy involved “maxing out our oil and gas reserves”.

But Jim Watson, a professor of energy policy and director at the University College London Institute for Sustainable Resources, said Tory ministers’ statements on the new licences were misleading, including claims that drilling for oil and gas domestically was better for the environment.

“The largest source of UK oil and gas imports is Norway,” said Watson in a tweet. “Norwegian production has a lower carbon footprint than UK production.

New UK licences contradict evidence that 1.5C requires no new oil and gas licensing, including from the IEA.”

Alpha Kaloga, the lead coordinator of the Africa Group on loss and damage, which was present at the Cop27 meeting in Egypt where countries agreed a groundbreaking agreement to provide funding for vulnerable countries hit hard by climate disasters, said all the credit gained by that agreement had been lost.

“This credit has eroded and become frustration and distrust, as the UK deliberately has chosen to remain on a fossil-fuelled collision course,” he said.

“Phasing out coal was the new concept that was promoted in Glasgow, but since then the UK has been consistently promoting the indefensible. The new licences are no surprise to us.

“The UK and other countries continue to undermine the ambitions of the new loss and damage fund to address climate impact.”

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Tom Rivett-Carnac, a political strategist for UN climate chief, Christiana Figueres, when the 2015 Paris agreement was reached, said: “They have lost all credibility on climate and environment.”

Dr Pa’olelei Luteru, the chair of the Alliance of Small Island States, which includes countries suffering some of the worst effects of global heating including Antigua and Barbuda, Fiji and the Maldives, said countries must heed the best available science that points to the need to reduce emissions by 45% by 2030, and reach net zero by 2050.

“We are seeing unprecedented climate events, with July breaking global temperature records. Our world is rapidly approaching the 1.5C warming threshold, which will result in catastrophic consequences for small island developing states.

“As we grapple with a climate crisis we did not cause, our developing islands are depending on the stewardship of the bigger countries to steer our world away from the worst impacts of climate change.”

David Tong, the global industry campaign manager at Oil Change International, said: “When you’re in a hole, the first step is to stop digging.

Two years ago, when it hosted the UN climate talks, the UK government asked the world’s top energy experts in the International Energy Agency to model a pathway for the energy sector to limit warming to 1.5C.

“The IEA did so, concluding there is no room for new oil and gas expansion beyond existing fields. Now, the UK’s government is ignoring the conclusion of the report it commissioned, diving headfirst into a deadly hole.”

But in Spain, which banned new oil and gas drilling with immediate effect in 2021, Sunak did find one ally – within the far-right Vox party. One of its MPs, Francisco José Contreras, tweeted his support for Sunak’s policy and said his party had opposed the Spanish ban on new oil and gas drilling.