Leaders from the energy industry, academia and civic society are urging the UK Government to strengthen national resilience by prioritising homegrown energy.
They join manufacturers, renewables developers, offshore operators and civic groups in calling for a “pragmatic approach” to building out renewable energy while maintaining homegrown oil and gas.
Offshore Energies UK (OEUK) said that current projections show by 2030 the UK will rely on Liquefied Natural Gas (LNG) from places like Qatar and the US for more than a quarter of its gas and for almost half by 2035 – up from around 14% last year. LNG cargoes are traded globally and are four times more carbon intensive than homegrown gas. They can be diverted away from the UK during periods of high international demand, increasing the risk of price spikes and supply shortages.
The UK is transitioning towards greater use of renewables and has the world’s second biggest offshore wind capacity after China. But the nation also has a critical demand for oil and gas, which provide three quarters of the UK's total energy and underpin critical industrial manufacturing and the electricity grid, OEUK said. The question facing policymakers is not whether the nation will continue to use oil and gas, but where it will come from and what this means for future security, jobs, emissions and the economy, it added.
The organisation said that industry is asking for reform of the Energy Profits Levy (EPL) or “windfall tax”, with early introduction of the government’s Oil and Gas Price Mechanism (OGPM) to stimulate investment in the UK’s domestic oil and gas production, which would boost energy security, secure jobs and unlock up to £50bn of private investment and £15bn in tax receipts over the next decade.
David Whitehouse, Offshore Energies UK’s CEO, said:
“Conflict in the Middle East highlights again the UK’s growing challenge of where and how it gets its energy. While we mustn’t lose perspective as lives are lost across that region, there are inescapable real-world consequences for our security of supply.
“This is now the second global energy shock in just four years. It underscores the risks to the UK and across wider Europe of a system that favours increasing reliance on imports – which now make up more than 40% of our energy in the UK. It is right that we take stock and learn lessons.
“The solution is backing homegrown energy and our people with practical policy reform. Only by making the most of all forms of domestic production, from oil and gas to our world class renewables sector can we weather the challenges of today and seize the opportunities of tomorrow.
“Oil and gas still supply around 75% of UK energy and will still supply a fifth of demand in 2050 even with the build out of our world class renewable sector. The question is not whether we will continue to use oil and gas, but where it comes from and what this means for our future security, emissions and economy.
“A secure, reliable energy system requires a partnership between government and industry. We need a pragmatic partnership that accelerates our economic and climate goals, protects jobs, and ensures we always have homegrown energy to rely on.”
