Government Response to Offshore Energies UK on North Sea Production
The UK government has rejected concerns raised by the energy trade body Offshore Energies UK (OEUK) regarding the need to increase domestic North Sea oil and gas production. The government emphasized the importance of moving away from dependence on fossil fuels amid global market volatility.
Offshore Energies UK warned that without boosting homegrown energy supplies, the UK will face greater reliance on imports during a period of increasing global instability. The group stressed the urgency of expanding domestic energy production to shield consumers from global market fluctuations and to reduce emissions.
This warning coincided with the ongoing conflict in the Middle East entering its fourth week, which has led to historic volatility in energy markets. UK gas prices have more than doubled in less than a month as a result.
Government Rejects Industry’s Call for More Support
Despite the industry's appeal for enhanced support to slow the decline of the North Sea as an energy source, the government dismissed these calls. A government spokesperson stated:
“Issuing new licences to explore new fields cannot give us energy security and .”
They further explained:
“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.”
Rising UK Reliance on Gas Imports
The decline of the North Sea oil and gas basin is expected to increase the UK’s dependence on imported gas significantly. Imports, sourced from countries such as the US and Qatar, accounted for about 14% of the UK’s gas supply last year. This figure is projected to rise to over 25% by 2030 and nearly 50% by 2035, according to OEUK’s analysis.
The group’s annual flagship report also highlighted that oil and gas will remain part of the UK’s energy mix for decades. They noted that sourcing gas from the North Sea would result in a lower emissions footprint compared to importing liquefied natural gas (LNG) transported on super-chilled tankers from overseas.
Industry Leaders Stress Importance of Homegrown Energy
David Whitehouse, CEO of OEUK, emphasized the challenges posed by recent global events:
“Recent events have shown 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 advocated for a stable tax framework for the industry, stating it is:
“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.”
Currently, oil and gas account for approximately 75% of the UK’s energy consumption. OEUK’s research indicates that hydrocarbons will still supply about 20% of the UK’s primary energy demand by 2050 under the country's net zero plans.
Enrique Cornejo, OEUK’s energy policy director, outlined the group’s position on climate targets and domestic resource use:
“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.”
