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More drilling for oil and gas in the North Sea is unlikely to reverse the energy price climb that has created hundreds of thousands of new energy poor in the UK.
This is what the Climate Change Committee—an independent advisory body to the UK government—said this week in a letter sent to business secretary Kwasi Kwarteng.
“The price of gas is very, very marginally affected by what we produce in this country,” said the chairman of the Climate Change Committee, John Gummer, said, as quoted by Bloomberg. “We know that already because more than half of it is produced in this country and still we are paying the international price.”
What’s more, new oil and gas production will take “decades to develop,” and it won’t have much of an impact on energy prices in Britain because of its interconnectedness with international oil and gas markets.
On the other hand, the CCC chairman said, building more offshore capacity would have reduced energy costs for households.
In more comments on the idea of new oil and gas drilling in the North Sea, Gummer said that this idea undermined efforts by the UK to build an image for itself as a frontrunner in the energy transition.
“We are very concerned about the signalling impact” of new North Sea exploration, he said, adding that “an end to UK exploration would send a clear signal to the rest of the world that we really are serious about [limiting global warming to] 1.5C.”
Gummer explained that should new exploration be approved, it would make it harder for the UK to persuade other nations to do more about emissions-cutting. However, media noted that the CCC chairman had stopped short of embracing a ban on new oil and gas drilling in UK waters in the North Sea.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com