(Bloomberg) -- The UK’s offshore oil and gas industry called on new Prime Minister Liz Truss to speed the approval of more exploration licenses to help boost domestic fuel supplies.
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The lobby group identified £26 billion ($30 billion) of potential investments in the North Sea by the end of the decade that would enable the UK to meet about half its demand for oil and gas from domestic supplies. Without these projects, fuel demand would be met increasingly by imports, the group said.
The UK’s petroleum industry has an opportunity to arrest its long-term decline as soaring energy prices bring concerns about security of supply to the fore. The situation threatens to devastate households and businesses this winter, and is already dominating Truss’s agenda just one day into her leadership. Linking the future of the North Sea to the way out of the current crisis could revive the fossil fuel industry even as the country seeks to transition to clean energy.
“We need the new government to rapidly announce the next round of oil and gas exploration licenses and speed up production approvals,” said Mike Tholen, acting chief executive officer of Offshore Energies UK. “Our North Sea reserves mean the UK can protect itself -- provided we invest -- as well as building the low-carbon systems for the future.”
In its annual economic report published on Wednesday, the industry group acknowledged that new investment won’t offer a near-term solution to the energy crisis. New fields currently under development won’t start producing until late 2026 with peak production coming a year later. That’s roughly in line with Shell Plc’s plans to bring on the Jackdaw gas field in the mid-2020s after taking a final investment decision on the project earlier this year.
The push to boost the UK’s domestic oil and gas follows a long period when the main energy policy focus was on climate goals, and questions about whether investments in new fields should even be permitted. The country has committed to achieve net-zero emissions by 2050 and the Climate Change Committee sees oil demand falling by as much as 98% if this pledge is fulfilled.
Offshore Energies said there will be a major role for oil and gas in the UK’s energy mix even as the country moves toward this target.
“We must expand the supply of low carbon energy including wind and hydrogen but the scale-up will take time,” Tholen said. “UK gas will give us a bedrock of reliable energy through the transition and minimize reliance on imports.”
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