An early visit by Prime Minister Andy Burnham to meet North Sea energy operators and their workforce could mark a crucial turning point in government attitudes towards home-grown energy and the future of the offshore industry, says David Whitehouse, Chief Executive of Offshore Energies UK (OEUK).
OEUK has requested an urgent prime ministerial visit to operators in Scotland and supply-chains in the Northeast of England, arguing that energy production must be incentivised ahead of increasing reliance on imported oil and gas.
Energy policy cannot be made in Westminster alone.
The new government has an opportunity to reset the relationship with the North Sea industry and the communities that depend on it. The choice is not between oil and gas or clean energy. It is whether we produce the energy we need here in the UK, with our own workers and supply chains, or import more from overseas at higher cost and with higher emissions.
Using imported liquified natural gas (LNG) from America or Qatar which is increasingly being used to replace North Sea gas, involves carbon emissions that are four times higher.
OEUK analysis shows that a reset addressing reform of the regulatory and tax framework for the North Sea industry, including early implementation of the government’s proposed Oil and Gas Price Mechanism, could unlock an additional £50 billion in oil and gas investment.
Over the next decade alone this would increase capital investment by £26 billion, boost tax receipts by more than £13 billion and support tens of thousands of jobs.
It would also help the UK meet at least half of its oil and gas needs from domestic production between now and 2050.
Faster reform could also cut the imported liquified natural gas (LNG) share of UK gas supplies to 6% by 2035, compared with 46% without reform.
Independent polling data from Opinium earlier this month shows that the government’s own supporters are looking for a reset on energy policy from the new prime minister. Labour voters favour scrapping the ban on exploration and following Norway’s pragmatic approach to new licences by 42% to 35%. And almost 70% of Labour voters say the UK should prioritise North Sea oil and gas production compared to just 9% who said it doesn’t matter where oil and gas comes from.
David Whitehouse chief executive of Offshore Energies UK said:
“The UK will still need oil and gas for decades to come. The question is whether we produce as much of that energy as possible here — supporting our own jobs, communities and economy — or rely increasingly on imports while exporting investment and economic value overseas. Government policy should back North Sea production as part of a secure and managed energy transition.
“Energy policy cannot be made in Westminster alone without listening to the people and communities who have powered this country for the last 50 years. For too long, offshore workers, engineers, technicians and those across the energy supply chain have been talked about rather than listened to. A visit to meet the North Sea workforce would demonstrate that the new Government intends to build a different relationship with the people and communities at the heart of Britain’s energy system.
The new Prime Minister must now turn listening into action. Words of support for projects such as Jackdaw and Rosebank cannot be a substitute for the policy reset our country needs. The new Government must back North Sea oil and gas over increased reliance on imports — delivering the fiscal and regulatory reforms required to unlock investment, protect domestic jobs, strengthen energy security and support the energy transition.”
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