While a $60-per-barrel price cap…
Bearish news is continuing to…
Domestic oil and gas production will continue to play an important role in the UK’s energy mix, despite the commitment to net-zero emissions by 2050, Prime Minister Boris Johnson said on Tuesday.
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.
The government sees oil and gas as having a role in the UK’s energy transition, a cabinet spokesman told The Independent.
“The oil and gas industry will continue to play a role as we make that transition. They are investing in clean technologies like carbon capture and hydrogen that we need to get to net zero,” the spokesman said.
Meanwhile, the government is expected to approve for development six new oil and gas fields in the North Sea this year, The Daily Telegraph reported this week.
Rishi Sunak, Chancellor of the Exchequer, has asked Business and Energy Secretary Kwasi Kwarteng to fast-track the licenses for six fields as fears grow over the economic impact of net-zero by 2050, The Telegraph has learned.
Earlier this year, the offshore energy industry body OGUK 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 Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com