THE oil and gas industry is "peddling a fantasy", campaigners have warned after bosses said the North Sea could produce about half of the oil and gas the UK will need in the run up to 2050 – but only if new projects can be developed.
Offshore Energies UK (OEUK) said the UK is on track to produce just four billion of the 13 to 15 billion barrels of oil and gas the country will need over the next 25 years as it stands.
However, OEUK argued that by “unlocking additional resources from waters around the coast” this could be increased to about seven billion barrels – a move which the industry body said could be worth £150 billion to the UK economy.
Speaking as it published its 2025 Business Outlook report, chief executive David Whitehouse said this could only happen if the UK Government consents to new projects.
However, Uplift executive director Tessa Khan responded to the comments and said "new licensing is a pipedream. Uplift are an environmentalist group which supports efforts to transition from oil and gas production in the UK.
Khan argued that between now and 2050, new licences are expected to provide in total just over 100 days of gas — the equivalent of an extra four days of gas a year.
Since Labour came to power the Department for Energy Security and Net Zero has maintained it will not issue licences to explore new fields, as it seeks to reduce emissions towards the target of the UK achieving net zero by 2050.
Whitehouse told journalists that while “the bulk of that additional oil and gas” could come from existing fields, it would “require new projects to meet that target” of the UK producing seven billion barrels.
Whitehouse noted that independent advisers at the Climate Change Committee had said to get to net zero by 2050 the UK would need some 13 billion to 15 billion barrels of oil and gas.
The OEUK chief executive stated: “Today, we’re on track to produce only four billion of those barrels in the UK, but with the right polices to encourage firms to invest we could unlock another three billion barrels and meet half our entire needs.”
Such a move would add £150 billion of gross value to the UK economy, he stated.
Khan responded: “The oil and gas industry is peddling a fantasy. The North Sea is an ageing basin with declining reserves that are now very expensive to extract. This is a matter of geology.
"These production figures are only possible if the industry is handed yet more tax breaks, or prices are so high that it punishes ordinary people who already can’t afford their energy bills. Given the excessive profits that these companies have earned in recent years, this wouldn’t be a popular choice, particularly when we’re lucky to have cheaper, renewable resources in abundance.
“Most of what is left in the North Sea is oil not gas, 80% of which the UK exports. The UK has burned most of its gas, a fact that new licensing won’t change. The last government issued hundreds of new licences over the course of 14 years, which have produced just 16 days worth of extra gas. Between now and 2050, new licences are expected to provide in total just over 100 days of gas - that’s the equivalent of an extra four days of gas a year.
"New licensing is a pipedream."
Khan also argued UK oil and gas production won’t bring down energy bills, and would "just lock us into an outdated, expensive source of energy for far longer than is necessary".
She added: "Industry claims that more imports would increase emissions don’t hold water either. The vast majority of UK gas imports come via pipeline from Norway, whose gas is half as polluting as the UK’s.
“The oil and gas industry would love nothing more than to return to the days when they paid minimal or no taxes in the UK. This government must not bend to their lobbying, and put the public interest first, which means phasing out oil and gas by building more homegrown clean energy and insulating homes.”
Ben Ward, market intelligence manager for OEUK, meanwhile said that gas from the North Sea had fewer carbon emissions associated with it than imported gas.
He said: “On average imported energy, liquefied natural gas, has a carbon intensity of four times the emissions of domestically produced gas.
“So there is a real environmental benefit to producing as much gas domestically as we can.”
Even while the UK strives towards net zero, Mr Ward said oil and gas would continue to “play a significant part” in meeting UK energy needs
“By 2050 a fifth of the energy we consume will still be oil and gas, even under a net zero scenario,” he stated.
“If we make the right choices we can produce half of that domestically ourselves.”
Ward continued: “As we look forward oil and gas will still maintain a massive part of our energy sector and we need to make sure we are producing as much of that domestically as we can to protect jobs, to generate income, to create energy security.”
OEUK’s Business Outlook report meanwhile insisted that “there are still substantial opportunities in oil and gas in the UKCS (UK Continental Shelf)” – noting there were four billion barrels of oil equivalent (BOE) “at various states of readiness” with a further two to three billion BOE “available to develop over time”.
The report stated: “The UK is projected to use at least 13-15 billion BOE by 2050. Using its own resources would help build energy security, support the exchequer and benefit the environment.”
A Department for Energy Security and Net Zero spokesperson said: “Oil and gas production will continue to play an important role for decades to come, with the majority of future production in the North Sea expected to come from producing fields or fields already being developed on existing licences.
“New licences awarded in the last decade have made only a marginal difference to overall oil and gas production.
“Only by sprinting to clean power by 2030 can the UK take back control of its energy and protect both family and national finances from fossil fuel price spikes.”
