Govt plans to increase North Sea oil production

‘We’ll open the North Sea taps to solve the energy crisis!’ Government plans to increase oil and gas production to bring down spiralling power prices

  • Treasury minister Simon Clarke said a government energy strategy is coming 
  • Number 10 wants to wean Britain from a dependency on Russian energy 
  • Mr Clarke said buying Russian oil or gas was akin to supporting Vladimir Putin 

The Government is planning to increase the production of North Sea oil and gas to counter rapidly increasing energy prices, a Cabinet Minister has claimed. 

Chief Secretary to the Treasury Simon Clarke told BBC’s Newsnight that more oil and gas will form part of the government’s strategic energy strategy which is due to be released next week. 

Mr Clarke said officials were examining proposals to approve additional oil and gas fields in order to wean Britain off Russian fossil fuels. 

Chief Secretary to the Treasury Simon Clarke, pictured, has indicated the government is planning to increase the production of North Sea Oil and Gas to mitigate against the current energy crisis and spiralling bills

Chancellor Rishi Sunak reduced excise duty on petrol and diesel by 5p yesterday, but that has not countered the dramatic increases in the price of fuel over the past three months

He said: ‘We need to get that production going to the maximum extent that we can. It simply would not be right to support Putin’s war in Ukraine by buying Russian oil and gas, but there are costs to that. We are very candid about that.

‘The government will be setting out our wider energy security strategy in the coming weeks. But in essence it means doing more of all of the things that we know we need to do. So it means more new renewables, it means more new nuclear, and it means more oil and gas from the North Sea. And its all of those things in tandem.’

When questioned about the possibility of increasing production in the North Sea, Mr Clarke said: ‘I was at a summit with the Prime Minister and Business Secretary just last week, meeting with the sector. 

‘We are determined to unlock more production in the North Sea. I can’t commit to specific fields, but certainly it is our intention to unlock more production capacity in the North Sea.’ 

There are currently about 4.4 billion barrels of oil under UK waters according to the North Sea Transition Authority with the possibility of more than 10 billion in unproven reserves which could improve the country’s energy security, but will have little impact upon price as these are agreed internationally.  

Part of the Government’s strategy could be to open up new oil and gas fields in the North Sea, file photo

If other countries ramp up production this could have a much greater impact on prices.

The Organisation of the Petroleum Exporting Countries (Opec) is estimated to be able to increase oil production by around four million barrels a day, something that would significantly impact on prices.

The UK could also get more gas from the US and the Gulf countries. The Grain liquid natural gas (LNG) terminal in Kent can in theory bring in enough gas to supply 25 per cent of UK demand.

But in reality this can only happen if enough ships dock there. In a record set last April the terminal supplied 15 per cent of demand.

This means there is plenty of capacity to ramp up how much comes in through the UK’s LNG terminals, which in turn could also be exported to Europe. 

Oil giant Shell paused work on the Cambo oil field off the west coast of Shetland in December after admitting the economic case for the investment was ‘not strong enough’.  

Industry body Offshore Energies UK – formerly Oil and Gas UK – has previously said blocking long-planned energy projects such as Cambo would risk leaving the UK at the mercy of global energy shortages.

But Greenpeace warned the proposed development would not tackle high bills or improve energy security and urged the Government to throw its weight behind renewables, insulation and heat pumps to get the UK off oil and gas.

Shell’s decision to pull out was announced just weeks after the UK hosted the UN Cop26 climate summit in Glasgow, where countries pledged to try to limit global warming to 1.5C to avoid the worst impacts of an overheating planet.

The International Energy Agency has said that no new oil and gas exploration projects should go ahead if the world is to meet the 1.5C goal.

In November, Scotland’s First Minister Nicola Sturgeon said the Cambo project should not go ahead, following months of pressure from opposition parties and campaigners for the Scottish Government to make its position on Cambo clear.

And the advisory Climate Change Committee has said high prices are driven by global markets and increasing UK fossil fuel extraction would have virtually no impact on bills, urging efforts to cut oil and gas demand instead.

Philip Evans, oil and gas transition campaigner for Greenpeace UK, said the Cambo project would produce heavy crude oil, for which the UK has very little refining capacity, and it would ‘do nothing to tackle high bills or shore up energy security’.

He said: ‘Shell wasn’t interested in pursuing this project when it was a bad look for them, but now they stand to gain billions in the midst of wartime price hikes, they’re interested again.

‘Meanwhile our bills soar, and offshore workers are trapped in a volatile industry.

‘The UK and North Sea communities deserve better.

‘With the spring statement and a new energy strategy coming up, the Government must throw its weight behind British renewables, a proper home insulation scheme and heat pump rollout, or our energy policy will be disrupted by the whims of fossil fuel giants for decades.’ 

Source: Read Full Article