Offshore Energies UK (OEUK) has said today’s House of Commons Debate on the energy trilemma – the critical balance between energy security, costs, and environmental impact – made a powerful case for new investment in UK energy production.
Contributions from all sides of the House came ahead of a reported day of widely anticipated energy announcements by UK government, setting out new measures and potentially public investment in long-term renewable energy projects.
However, the Office for Budget Responsibility forecasts the UK’s transition to net zero will cost £1.4 trillion, the majority of which needs to come from private company investment. To unlock that capital, OEUK has said firms need long-term support and intelligent energy policy from governments as they continue to face the 75% windfall tax and the uncertain climate for maintaining UK energy security.
The waters off the coast of the UK still contain oil and gas reserves equivalent to 15 billion barrels of oil equivalent (boe), enough to fuel the UK for 30 years. Yet OEUK’s Business Outlook Report, being published on 28 March, shows the UK spent £117 billion on imported energy in 2022. This is an increase of over 50 per cent from the previous year, which means the nation is missing out on the revenue streams it could be using to power the energy transition.
By 2030, the UK will be reliant on other countries for at least 80% of its gas and 70% of its oil if there is no investment in new infrastructure – offshoring the associated jobs and benefits to the economy. OEUK has urged the UK Government to nurture UK oil and gas production and avoid an even more rapid decline than that which is currently forecast.
Offshore Energies UK CEO David Whitehouse comments:
“After a Spring Budget pitched on growth, with billions of pounds of investment in the energy sector at stake, we hope the Government’s anticipated energy day will encourage growth, boost jobs, cut emissions and protect our energy security. Giving clear support to the UK’s expanding offshore energy industry will be a good start.
“Our industry is essential for the economic and environmental prosperity of our country. Our brilliant, skilled people power not just our homes, transport and industry, but the everyday products we need to live well.
“Our members are the same companies that are investing to accelerate our expansion into renewable sources. The homegrown expertise of our people is driving innovation in cleaner energy production. We are determined to create a sustainable future.
“As we build that future there is no simple choice between oil and gas or renewables. The reality is we need both.
“In the mid-2030s, oil and gas will still provide 50% of our energy needs. By investing in homegrown production we avoid costlier, less secure and higher carbon imports while supporting an industry we need to make cleaner, more affordable energy in the UK, for the UK.
“To do this, we need government to confirm its continued support for UK oil and gas production and provide clarity on the price floor for the energy profits levy. This will give companies the confidence to invest in UK energy and drive economic growth, jobs and progress towards net zero in a way that benefits UK industries of the future.”