|The UK’s offshore energy industry has welcomed a speech by Boris Johnson warning that it would be “crazy” to shut down North Sea oil and gas production in the face of global shortages and price spikes. |
The Prime Minister told Scottish Conservatives, meeting in Aberdeen, that failure to invest in oil and gas production in the UK’s own waters would force the nation into ever-increasing reliance on imports – including from countries like Russia.
Offshore Energies UK (OEUK), whose 400 members embrace established industries like oil, gas and offshore wind, plus emerging technologies like hydrogen production and CO2 capture, all operating in UK waters, said the tragic events in Ukraine, and the linked global energy crisis, showed the importance of maintaining UK production of oil and gas.
Deirdre Michie, chief executive of OEUK, said: “The UK relies on oil and gas to supply 73% of its total energy. About 23 million homes rely on gas for heating and gas fired power stations produce 42% of our electricity. Oil also fuels the 32 million UK vehicles powered by petrol or diesel.
“The move to net zero by 2050 means this reliance on oil and gas should decline over the next three decades but that will take time during which we will need to maintain secure supplies. The best way of securing those supplies is by being at the start of any pipeline- not the end. That means we should use the resources under the UK’s own continental shelf in preference to relying on other countries.
“The UK has around 11bn barrels of oil equivalent in proven or likely reserves of gas and oil – enough to maintain current level of supplies for 13 years. Right now, however, lack of investment means UK production is actually falling. That is creating an energy gap that will have to be met by ever-increasing imports, potentially including from Russia.
“All this can be reversed – the UK’s surrounding seas have enough oil and gas to help support the nation through the transition to Net Zero, provided they get the right level of investment.
“So we welcome the prime minister’s comments and would ask his government to work with us on the practical steps needed to encourage energy companies to invest in new fields and wells on the UK’s continental shelf.”
£375 billion – Total production taxes paid since offshore oil & gas industry began 50 years ago
74 billion cubic metres – Amount of gas consumed by the UK in 2020
1,100 cubic metres – Amount of gas consumed annually per UK citizen
73% – Proportion of the UK’s total energy provided by oil and gas
195,000 – Number of UK jobs supported by the UK oil and gas industry
40% – Tax rate on profits from oil and gas production in UK waters – the highest rate of any industry
75% reduction in gas output – Without new investment UK production is predicted to fall sharply by 2030, increasing reliance on imports.