UKOOG reaction to the Energy White Paper

14 December 2020

Responding to the release of the Energy White Paper, Ken Cronin, Chief Executive of UKOOG, said:

"We welcome the publication of the Energy White Paper today and the acknowledgement by Government that "The UK's domestic oil and gas industry has a critical role in maintaining the country's energy security and is a major contributor to the economy", "The projections for demand for oil and gas though much reduced is forecast to continue for decades to come" and "We will therefore make sure the natural gas markets and networks evolve in a way which enables continued investment and ensure secure supplies but also promotes the use of low-carbon options, wherever possible"

"We are however disappointed that while stressing the importance of sourcing lower emission fuels, the Government failed to tackle the issue of growing imports of oil and gas. According to the most recent analysis by the Climate Change Committee (CCC) for the Sixth Carbon Budget using their 'Balanced' and 'Headwinds' scenarios, import dependencies will rise to between 61% and 83% for gas and up to 40% for oil by 2050 when feedstock oil is included in the assessment (which was not included in the CCC Numbers). This means the UK would spend between £168bn and £283bn on natural gas imports and between £136bn and £142bn on oil imports by 2050. That would leave a total bill of between £304bn and £425bn to UK consumers. In terms of imported carbon emissions, failure to address this large shortfall between supply and demand by increasing UK production would add between 112 and 145 million tonnes CO2e to the UK's gas supply carbon footprint over the next 30 years – the equivalent of the annual heat and power emissions from 48.4 million homes.

"We agree with the CCC's assessment that "UK industries should face a level playing field under the UK's ambitious targets"; it is simply not acceptable for carbon intensive imports to flood the UK whilst our domestic industry faces ever greater regulatory burdens and costs, especially at a time when British businesses will be recovering from the economic storm of 2020.

"We also welcome the Government's commitment to repurposing: "We will provide opportunities for oil and gas companies to repurpose their operations away from unabated fossil fuels to abatement technologies such as carbon capture, utilisation and storage (CCUS) or clean energy production such as renewables and hydrogen". This is something that we as a sector will actively pursue."


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