Offshore Energies UK (OEUK) has submitted a “robust” response to the UK Government’s consultation on how best to manage the future of the UK’s gas sector.
The consultation looks at how to best ensure the UK’s energy security and the gas it needs for decades to come as supply and demand across the energy mix evolves within a period of geopolitical and economic uncertainty.
OEUK said the consultation presents decline in UK gas production as an unavoidable geological outcome and that no realistic level of investment can increase domestic supply.
The response from OEUK, submitted to the UK Government this week, shows why this undervalues the potential of the UK Continental Shelf (UKCS), it said.
OEUK says that recoverable gas reserves amount to 456 billion cubic metres (bcm), more than six times the UK’s annual requirement and more than double the NSTA’s production projection of 226 bcm between 2025-2050.
However, these reserves can only be unlocked by attracting new investment with practical reform of taxes and regulations, it added.
OEUK’s response draws on data provided by its members that has also been submitted to government, detailing 111 named projects equivalent to £50 billion of investment that could be unlocked with such reform.
The organisation says that its response is also grounded in new independent research from the Westwood global energy consultancy, which provides an evidence‑based overview of the UK’s gas infrastructure, including pipeline interdependencies, terminal resilience, throughput trends and risks of policy-driven decline. Furthermore, it is also based on data from the UK Government’s own National Energy System Operator (NESO) published last autumn, it added.
Enrique Cornejo policy director of OEUK and lead author of the OEUK’s submission to government, says:
“This is one of the most important energy consultation exercises of recent years. It’s a critical opportunity to signal the UK is open for investment, safeguard energy security and back industries and jobs across the nation.
“Our submission makes clear that the most secure, reliable and lower emission source of gas for the UK is its own domestic production.
“The decline of the UK’s domestic gas supply is being driven by policy not geology. For as long as the nation requires gas, it’s in the national interest to produce as much of that gas as possible at home, where it delivers lower lifecycle emissions, greater energy and industrial security and higher economic value than imported alternatives.
“The health of the UK’s energy security, economy and critical supply chains depends on maintaining robust domestic oil and gas production at the heart of a modern industrial economy.”
OEUK’s submission also says:
- To unlock investment, the government must bring forward its plans to reform the Energy Profits Levy on domestic oil and gas production, which currently brings the headline rate to 78%. “A stable, evidence-based policy framework is essential to unlock investment, protect jobs, and deliver a successful transition with a predictable, competitive fiscal and regulatory environment,” the evidence submission says.
- There must be “a presumption in favour of homegrown energy including oil and gas as a foundation of an energy and industrial policy that benefits the economy, the environment, jobs and communities, at the same time as providing an anchor for the UK energy supply chain,” the evidence submission says.
- The submission underlines the need for the government to recognise the connection between the domestic energy system and the wider UK industrial base. “We must continue to maintain and utilise critical oil and gas infrastructure to prevent the permanent loss of Britain’s industrial capacity”, it says.
- Piped imports, LNG, interconnectors and gas storage all have an important role in an evolving UK gas system, with LNG providing valuable flexibility and the UK already benefiting from significant import capacity. However, OEUK says that LNG should be treated as a complement to domestic production, not a substitute. Future Norwegian piped imports also cannot be taken for granted
- In 2024, the UK Continental Shelf provided 43% of the UK supply with pipeline imports from Norway making up a further 43% and imports of liquified natural gas (LNG) the final 14%.
- Conversely, LNG use which is four times more carbon intensive than North Sea gas, could make up 46% of the UK’s gas supply by 2035 if domestic production is run down. At the same time, supplies from Norway are also set to decline.
