Ministers rebuff trade body’s call to boost North Sea oil and gas production

The UK government has dismissed a warning from an energy trade body that failing to produce more homegrown North Sea oil and gas will leave the UK increasingly reliant on imports at a time of rising global instability.The industry group, Offshore Energies UK, has said the UK “urgently” needs a greater supply of domestically produced energy or consumers will be left “more exposed to global volatility and higher emissions”.The warning came as the war in the Middle East entered its fourth week. The escalating conflict has triggered the biggest oil and gas supply shock in the history of the market and caused UK gas prices to more than double in under a month.But the industry’s call for more support to help slow the decline of the North Sea as a provider of energy was rebuffed by the government. A spokesperson said: “Issuing new licences to explore new fields cannot give us energy security and will not take a penny off bills.”They added: “Regardless of where it comes from, oil and gas is sold on international markets, which set the price for British billpayers – making us a price taker. The only way to truly protect ourselves from these price spikes is to get off the rollercoaster of fossil fuel markets.”The decline of the North Sea oil and gas basin means that the UK’s reliance on gas imports – which are sourced from countries including the US and Qatar – is likely to increase sharply from about 14% last year to more than a quarter of its gas supply by 2030, and almost half by 2035, it said.The group’s flagship annual report added that the UK will continue to use oil and gas for decades to come and sourcing this from the North Sea gas would have a lower emissions footprint than importing liquified natural gas on super-chilled tankers from overseas.David Whitehouse, the chief executive of OEUK, said: “Recent events have shown how quickly energy markets can tighten and how easily cargoes can be diverted away from the UK when other buyers bid higher. Energy security means backing homegrown oil and gas alongside renewables.”He argued that a stable new tax regime for the industry was “essential to reduce reliance on volatile imports, protect skilled jobs and supply chains, and ensure the UK can decarbonise while keeping energy secure and affordable”.The UK continues to rely on oil and gas for about 75% of its energy needs and hydrocarbons will still meet about a fifth of the UK’s primary energy demand in 2050 under its net zero plans, according to the OEUK’s research.Enrique Cornejo, the OEUK’s energy policy director, said: “What we’re setting out here is that there is a pathway to meet climate targets that makes a responsible use of our homegrown resources, and that also ensures that we do not offshore those emissions to other countries.“Because of how accounting of carbon emissions works for every country, it would be very easy for us to just say we will not produce our energy in the UK, or we will not produce our steel in the UK, and we’re just pushing that problem elsewhere.”