Offshore Energies UK (OEUK) has responded to the speech delivered today by Secretary of State for Energy Security and Net Zero, Ed Miliband MP, which outlined lessons learned from the recent geopolitical crises in Ukraine and the Middle East.
OEUK has been clear that the lesson of successive geopolitical crises is that true energy security can only be underpinned by homegrown energy, including oil, gas, and renewables, and a focus on domestic resilience.
The Secretary of State rightly acknowledged that the North Sea is an important and valuable resource and does not agree with those calling for the UK to ‘“turn off the taps” overnight.’ However, current policies continue to leave the UK increasingly exposed to over-reliance on energy imports, particularly LNG, and growing geopolitical risk. The solution is a focus on domestic energy production – domestic oil and gas alongside renewable energy.
Around 75 per cent of the nation’s energy comes from oil and gas and the government has recognised it is needed for decades to come. The UK can make the most of its own resources or choose to ramp up imports. Domestic production supports jobs, economic value, and communities while reducing reliance on insecure and carbon-intensive imports.
David Whitehouse, Chief Executive of Offshore Energies UK, says:
“The Secretary of State rightly acknowledged that we cannot turn off the taps in the North Sea. However, current policies leave the UK more reliant on historic levels of energy imports. This makes the country increasingly vulnerable. The solution is clear; the government must support valuable North Sea oil and gas production alongside the build out of domestic renewable energy.
“The lesson from events in the Middle East and Ukraine is that resilient countries consistently support domestic energy production and value domestic manufacturing over imports. In a volatile world, homegrown energy production supporting jobs, communities, and value in our economy, must be prioritised over imports.
“Further clarity on Transitional Energy Certificates to support existing fields and infrastructure is a step forward. However, to benefit fully from the oil and gas resources in our existing fields and licences, we need favourable fiscal policies and enabling regulation. The solution exists today in the form of the early implementation of the Oil and Gas Price Mechanism (OGPM), a permanent windfall tax, which will ensure a fair return for the Treasury when prices are unusually high, but provide the necessary certainty for industry to invest.
“With the early introduction of the Oil and Gas Price Mechanism the UK would unlock £50 billion in extra capital investment, deliver additional tax receipts, and save over 40,000 jobs between now and 2030 that would otherwise be lost.
“There can be no energy security without homegrown production. A modern industrial Britain needs a diverse, secure, and affordable energy mix. This is not a choice between oil and gas and renewable energy; we must produce both at home to build a secure and resilient energy future.”
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