UK trade body calls on govt to prioritise domestic energy production
As sanctions imposed on Russia lead to supply and price shocks, the UK’s representative body for the offshore energy industry, Offshore Energies UK (OEUK), has urged the government to prioritise domestic energy production to protect consumers from these ramifications.
Offshore Energies UK – former Oil & Gas UK (OGUK) – issued its statement on Monday after a House of Commons briefing showed that in June 2022, the UK imported no oil, gas or coal imports from Russia. According to UK trade statistics, this was “the third month in a row with no Russian gas imports, but the first month (since 2000 when this data is available back to) with no gas, oil or coal imports from Russia.”
The energy security concerns exacerbated by Russia’s attack on Ukraine have led to the recent surge in global energy prices, which has reversed the trend of low demand and operating losses observed during the previous year.
Bearing this in mind, OEUK warned that global efforts to remove Russia’s oil and gas will cause supply and price implications for years to come, repeating its calls for a long-term energy strategy which recognises that 85 per cent of the UK households rely on gas for heating.
Commenting on this, Will Webster, OEUK Energy Policy Manager, remarked: “Consumers are all too aware of the impact cutting Russian supplies has had on the global price of oil and gas, and the reality is these effects will be here to stay for at least the medium term. This is why the UK must prioritise energy produced here.”
“Today gas heats 85 per cent of UK homes so in the short and medium-term, governments must support oil and gas in UK waters and carefully manage already declining production levels. At the same time, these same companies are also building the energy system of the future including expanding renewables to meet more of the UK’s electricity needs, while also developing hydrogen and carbon capture which could play a role in domestic heating and industrial power.”
The House of Commons briefing comes as figures show the UK’s trade deficit reached its highest level as a share of GDP since records began. This is caused in part because the UK imports much more oil and gas than it exports.
“We are seeing the reality of how complicated the transition to a lower carbon energy future will be, with a clear need to manage supply and demand as a whole and not in isolation. The transition is a necessity, which is why we continue to emphasise the need for consensus on a long-term and comprehensive energy strategy which prioritises production of energy in the UK and accelerates the transition for industries and consumers,” concluded Webster.
To alleviate the cost-of-living crisis in the country, the UK government recently imposed a windfall tax on oil and gas operators. However, Offshore Energies UK warned about the perceived negative effects of this tax on new investments, explaining that it may already be undermining major investments needed to keep Britain’s lights on.
In other OEUK-related news, the trade body disclosed recently that it is on the lookout for a new chief executive, as its current one is due to step down at the end of the year after almost eight years in the role.