Response to the CCC's letter on the compatibility of new O&G fields
24 February 2022
Responding to the CCC's letter on the compatibility of new UK oil and gas fields, Charles McAllister, Policy Manager at UKOOG said:
"The data within this letter supports the conclusions reached in the bespoke letter from the Climate Change Committee (CCC) on onshore petroleum last year: our strong view remains that there is a clear role for further oil and gas development in the UK.
"Based on the data from the CCC's 6th Carbon Budget, there will be a shortfall of around 1 trillion cubic metres of natural gas between now and 2050, with a minimum cost of £250bn and a potential cost of up to £2 trillion. The failure to develop UK resources will see capital from UK consumers exported across the globe.
"The alternative is clearly preferable: a UK shale gas industry could deliver tens of thousands of jobs, reverse the UK balance of payments deficit, create hundreds of billions of pounds in tax revenue and reduce the UK's energy supply carbon footprint.
"A UK shale gas industry of around 250 sites, each with 10 wells, could reduce the UK's cumulative import dependency by 50% by 2050, and see a total carbon emissions reduction of around 120 million tonnes CO2e. This is because, as the CCC have noted, 'the UK currently holds an advantage over production overseas due to the lower emissions footprint associated with its oil and gas production.'
"It is also important to remember that the CCC included 328 billion cubic metres of shale gas production in their modelling for the widespread innovation scenario in the 6th Carbon Budget.
"To conclude that further oil and gas development should not proceed if it risks increasing emissions within the UK's carbon budgets would lead to a conclusion that the UK should cease all industrial development and import all manufactured materials, food and energy instead. Doing this would see misleading reductions in UK emissions calculations, but as the CCC have noted before: 'the design of the policy framework to reduce UK industry emissions must ensure it does not drive industry overseas, which would not help to reduce global emissions, and be damaging to the UK economy'. The upstream emissions footprint of key UK provisions, such as oil and gas supply, must be considered wholly. After all, climate change is a global problem, not a local one, and it is our responsibility to account for all the UK's embedded emissions – from the beginning of production to the final point of usage.
"All things considered; the indisputable compatibility with net zero, skilled employment, significant tax revenues and increasingly obvious geopolitical advantages, means that the case for developing the UK's shale gas reserves is extremely strong. The Government needs to cease its political game-playing, reverse the illogical and hypocritical process through which the moratorium was reached and allow our members to proceed in levelling up the UK economy."
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