The UK’s main oil and gas body has hit back at calls by the government’s climate advisers to stop north sea exploration, in a tug of war between sustainability and energy sovereignty.
UK Onshore Oil and Gas (UKOOG) was responding to the Climate Change Committee’s (CCC) suggestion to business and energy secretary Kwasi Kwarteng that the UK should wean itself off oil drilling.
UKOOG’s policy manager Charles McAllister said there would be a shortfall of around 1trn cubic metres of natural gas between now and 2050, costing up to £2trn.
"To conclude that further oil and gas development should not proceed if it risks increasing emissions within the UK's carbon budgets would lead to a conclusion that the UK should cease all industrial development and import all manufactured materials, food and energy instead,” McAllister said.
“All things considered; the indisputable compatibility with net zero, skilled employment, significant tax revenues and increasingly obvious geopolitical advantages, means that the case for developing the UK's shale gas reserves is extremely strong.”
The CCC today said cutting fossil fuel consumption would be a better way to protect consumers from price rises than expanding North Sea oil production.
“An end to UK exploration would send a clear signal to investors and consumers that the UK is committed to the 1.5°C global temperature goal,” the body said.
“That would also help the UK in its diplomatic efforts to strengthen climate ambition internationally.”
Tensions over oil policy come against a cost of living crisis in the UK driven in large part by rising oil prices, exacerbated by Russia’s invasion of Ukraine, which pushed crude oil above US$100 a barrel today.
With 35% of Europe’s oil coming from Russia, the country’s adversaries are contemplating how best to respond to a potential choking off of the commodity to the west.
According to the National Grid, gas accounted for 39.5% of the UK’s power generation in the last year, though this was down to 24.9% in the last as wind from storms Eunice and Franklin briefly dropped the country’s dependency on oil.
UK-based North Sea oil drillers have enjoyed a bumper start to 2022 on the stock exchange as they reap the benefits of squeezed supply.
Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL) is up 24.95% YTD, BP PLC (LSE:BP.) has risen 16.90% and Enquest Plc (AIM:ENQ) is up 15.38%. The latter was up 7.91% to 22.5p as of 14:16 GMT against close yesterday.