As instability in the Middle East highlights the UK’s growing reliance on energy imports, leaders from across industry, academia and civic society are urging the government to strengthen national resilience by prioritising homegrown energy – from oil and gas to renewables – recognising that energy security is national security.
They join manufacturers, renewables developers, offshore operators and civic groups in calling for a pragmatic approach to building out renewable energy while maintaining the homegrown oil and gas the UK needs for decades to come.
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. 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.
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 says:
'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.'
Other chief executives have recently made the following public comments:
Claire Mack of Scottish Renewables: 'Now more than ever we must double down on capturing our homegrown energy potential to reduce the impact of global volatility.'
Greg Jackson of Octopus Energy: 'When we’re shipping liquefied natural gas, around the world, it is a lot dirtier than using locally produced gas. The UK needs more sovereign energy, and this requires practical, pragmatic decisions. We should use what’s available from the North Sea. While the price is set globally, there’s no point shipping gas from the other side of the world when we have it here.'
Elizabeth de Jong of Fuels UK, which represents the nation’s petrol and diesel providers for cars and trucks: 'Without home production, we’ve become a country dangerously exposed to instabilities abroad and would be relying on imports from countries where we have geopolitical concerns.'
Source: OEUK
