Britain faces a stark choice of ramping up North Sea gas production or depending on imports – and risking a bidding war – for the vast majority of supplies
Labour is refusing new exploration licences for new oil and gas fields (Image: PA)
Britain has less than two weeks’ stored gas supply and the nation risks becoming even more dependent on foreign imports unless urgent action is taken to protect energy security and make the most of North Sea reserves, the Government has been warned. Labour has doubled-down on its commitment to not issue new licences to explore new oil and gas fields and to ban fracking, but leading voices warn the UK now has a stark choice between energy dependency – which could be exploited by Britain’s foes in wartime – and enabling a renaissance for the North Sea industry.
It is feared that if the Britain fails to drill in new fields then the country will face international bidding wars for essential gas supplies to power homes, hospitals and other vital public infrastructure. Enrique Cornejo of industry body Offshore Energies UK warned that by 2035 the UK is on track to produce just 18% of its own gas, with Norway supplying 37% and 46% coming through liquefied natural gas (LNG) imports.
But he said if the UK introduced a new pricing mechanism this would unlock investment and Britain could provide 58% of its own gas by 2035, with LNG imports accounting for less than 10%. Warning of the risks of depending on imports, he said the UK will become more exposed to “sudden price spikes” in the international gas markets where supply “flows to the highest bidder”.
He said: “In simple terms, if domestic production falls faster than demand, we will increasingly be competing with other countries for supply at times when demand is highest, which risks higher prices and reduced security of supply.”
Highlighting Britain’s lack of major reserves, he said: “We have less than two weeks worth of stored gas supply.”
A analysis last year by sector body Energy UK found the country has “significantly less natural gas storage capacity compared to other European countries”. While the Netherlands had close to 200 days’ storage capacity, and France had nearly 120 days’, the UK had fewer than 20.
Fred de Fossard of the Prosperity Institute argued: “Over the last 20 years, the British Government has implemented policies which have eroded our energy independence. Governments of all major parties have wound down the North Sea, delayed new nuclear power and made it exorbitantly expensive, and banned the extraction of onshore gas. There is no prosperity without energy sovereignty. Britain must achieve this through the full use of our oil and gas reserves, harness resources in our overseas territories and implement regulatory reforms to make nuclear power quick and competitive to deliver.”
Shadow Energy Secretary Claire Coutinho said: “It is completely insane to shut down our own energy supply only to increase our imports of foreign gas with higher emissions instead. We must back the North Sea and get Britain drilling to protect jobs, generate tax revenue we can use to cut bills, and protect our energy security.”
Former Energy Secretary Sir Grant Shapps turned his fire on Energy Security and Net Zero Secretary Ed Miliband, saying: “Labour has left the UK in the absurd position of shutting down our own domestic energy production while making Britain ever more dependent on imported oil and gas even effectively paying Russia. It’s sixth form politics from Ed Miliband – ideological, unserious and increasingly dangerous. Weakening North Sea investment and stalling offshore projects is wantonly destructive of our energy security, economic resilience and national independence. A serious country would produce more of its own energy, not make itself more reliant on volatile foreign supplies and hostile regimes.”
Shadow Energy Security Secretary Claire Coutinho has condemned Labour’s policy (Image: Thomas Krych/ZUMA Press Wire/REX/Shutterstock)
Reform UK deputy leader Richard Tice called for a major u-turn, saying: “Labour’s net zero obsession is leaving the UK dangerously exposed. It’s time to unleash Britain’s energy treasure, get the North Sea drilling again, and put British jobs, bills and energy security first. This will create growth and prosperity.”
A spokesperson for the Department Energy Security and Net Zero said: “After the second fossil fuel crisis in half a decade, our clean power mission is the only way to bring down bills for good and take back control of our energy. The UK has diverse and resilient energy supply and gas will continue to play a key role as we transition to more secure, clean homegrown energy.”
Former Conservative Business Secretary Sir Jacob Rees-Mogg described Labour’s approach as a “dereliction of duty”, adding: “We have masses of our own resources not just in the North Sea but also shale gas which we ought to exploit. Cheap energy is the bedrock of economic growth.”