The UK could become much more vulnerable to price shocks and geopolitical events unless new offshore fields are approved and developed—and the UK’s gas production could plummet by 75 percent by 2030, the offshore energy industry body OGUK said on Thursday.
Without new investment in new gas fields in the North Sea, the UK will be left more vulnerable to crisis, such as the current one between Russia and Ukraine, the industry association noted.
Additional price shocks would add to the ongoing energy crisis in the UK where gas and power suppliers are going bust, while customers face a cost-of-living crisis when the energy market regulator Ofgem raises the price cap on energy bills as of April 1. The worst is yet to come for consumers in April, when millions of households would be thrown into energy poverty, with many people having to choose between eating and heating.
Domestic production currently meets 47 percent of the UK’s gas demand, 31 percent comes from pipeline imports from Europe, mostly from Norway, and 21 percent from LNG imports. In 2020, Russia supplied 3.4 percent of the UK’s gas, OGUK said.
According to the industry body, new fields are needed in the UK North Sea to stave off a predicted 75-percent plunge in domestic supplies if no new fields are approved. Many fields remain to be tapped, according to geological surveys. Such fields are estimated to contain oil and gas equivalent to 10-20 billion barrels of oil—enough to sustain production for 10-20 years, OGUK said.
“In the longer term, if UK gas production is allowed to fall as predicted, then our energy supplies will become ever more vulnerable to global events over which we have no control – as we now see happening with Russia’s threatened invasion of Ukraine,” OGUK Energy Policy Manager Will Webster said on Thursday.
By Tsvetana Paraskova for Oilprice.com
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