In a recent analysis by ECIU, it has been found that oil obtained from new licenses granted to North Sea producers will contribute to less than 1% of the fuels used in the country by 2030.
In a recent analysis by the Energy and Climate Intelligence Unit (ECIU), it has been found that oil obtained from new licenses granted to North Sea producers, destined for UK refineries, will contribute to less than 1% of the fuels used in the country by 2030.
This revelation challenges the government’s assertion that supporting further production, including projects like Rosebank, would significantly enhance the UK’s energy independence and security.
The ECIU report highlights that while projects like Rosebank could potentially reduce the UK’s reliance on imports, they would make a minimal difference in terms of domestic energy consumption. The government has consistently argued that increased domestic production would enhance energy security and reduce emissions associated with shipping.
Notably, around 80% of the oil produced in the UK is refined overseas, and the government acknowledged in response to a parliamentary question that it is not desirable to force private companies to allocate North Sea oil and gas for domestic use. This admission raises concerns that a significant portion of the oil produced by projects like Rosebank may be sold abroad rather than contributing to the UK’s energy needs.
Critics, including environmental campaigners, have protested the government’s plans, accusing it of prioritizing new production as a political strategy ahead of a potential general election. Professor Gavin Bridge from Durham University pointed out that most of the oil extraction in the North Sea is carried out by private or foreign state-owned companies, limiting the government’s control over the produced oil.
The ECIU’s analysis focuses on the production and refining of oil in the UK, particularly in relation to products like diesel, petrol, and aviation fuel. The study found that only 13% of the oil used in the UK was produced and refined domestically in 2022. As the availability of fuel in the North Sea decreases and demand falls, this percentage is expected to drop to a mere 1% by 2030.
Dr. Simon Cran-McGreehin, the Head of Analysis at ECIU, emphasized that new licenses for oil exploration distract from policies that could genuinely impact the UK’s energy independence. He stated, “Oil from new fields such as Rosebank will be traded internationally – as the Government has admitted. This oil is not earmarked for the UK and it won’t make any real difference to UK prices.”
In response, a spokesperson from the Department for Energy Security and Net Zero defended the government’s stance, stating that amidst increasingly unstable energy markets, it is prudent to leverage the advantages of homegrown resources in the North Sea. The spokesperson emphasized that supporting the oil and gas industry through annual licenses sustains jobs and generates tax revenue for the transition to clean energy.
However, the spokesperson acknowledged that the UK is a net importer of oil and gas, indicating that these new licenses would not transform the country into a net exporter or lead to an increase in carbon emissions beyond legally binding carbon budgets.
As the government pushes for legislation requiring the North Sea regulator to invite annual applications for new oil and gas licenses, the debate intensifies over the long-term sustainability of such endeavors. Environmental concerns, coupled with the economic and geopolitical implications of oil exploration, are likely to play a significant role in shaping the future of the UK’s energy landscape.