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There is a future for more domestic UK oil and gas supply, and Britain will continue to grant new licenses for oil and gas development projects in the North Sea, the UK’s Energy Minister Greg Hands said at an online energy conference on Tuesday.
“We need continued investment into the North Sea,” Hands said, as carried by Reuters.
Despite the net-zero pledge, the current UK government continues to see the UK North Sea oil and gas industry as vital to energy security.
Earlier this month, UK Prime Minister Boris Johnson said that domestic oil and gas production would continue to play an important role in the UK’s energy mix, despite the commitment to achieve net-zero emissions by 2050.
While the UK is pushing to build out more offshore wind capacity, it will continue to allow new oil and gas projects in the UK North Sea as it looks to cater to its energy security. The past few months have shown that Europe and the UK cannot go without natural gas, while Britain has seen a cost-of-living crisis unfold with energy bills soaring and the price cap on those bills set to rise by 54 percent as of April 1, which is estimated to affect 22 million UK households.
Earlier this year, industry body Offshore Energies UK (OEUK) warned that 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 UK government is not willing to shut down the sector that provides 73 percent of the UK’s energy and meets 47 percent of its natural gas demand. But authorities have recently proposed that new project developments pass a so-called net-zero compatibility test.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.