Britain’s oil and gas industry has urged ministers to fight the gas price crisis by maintaining current production and approving new North Sea fields before 2027, if the nation is not to surrender its energy control to overseas suppliers.
Meanwhile, Bloomberg reported yesterday that China is instructing its traders to buy energy “at all costs”.
Trade lobbyists Oil & Gas UK (OGUK) reminded ministers earlier this week that gas-fired power stations normally provide a third of the nation’s electricity.
Last weekend, that share shot to nearly half, including a little coal, as a high-pressure system from over the British Isles pushed wind generation as low as 1.2%.
OGUK says Britain gets about 73% of its total energy – also including transport and heating – from fossil fuels.
The industry wants D-BEIS to licence new gas fields in the North Sea to replace depleted exploration or economically unviable plots.
OGUK predicts that North Sea output benefitting the UK will roughly halve by 2027 unless new fields are developed. If that happens, the UK will be even more reliant on imports than now.
Will Webster, the fossil lobbyists’ policy manager said: “This price surge shows how we continue to need UK gas”.
“Letting production fall faster than we can reduce demand risks leaving us increasingly dependent on other countries, and at the mercy of global events over which we have no control.
“While the UK continues to use oil and gas, we should make the most of the resources in our control while working for a low-carbon future,” Webster contended.
In March, D-BEIS and the industry unveiled a joint North Sea Transition Deal, aimed at juggling new permitting against decarbonising existing production.
Yesterday it emerged that Han Zheng, Beijing’s senior vice president responsible for energy, summoned China’s power chiefs to an emergency meeting this week, ordering them to buy oil and gas supplies on international markets ‘at all costs’.
Bloomberg reported wholesale power prices in China have more than doubled since January, amid slow coal output and factories’ rebound after Covid. Coal futures hit record levels this week.
Supply of electricity to industry in certain regions is already being curtailed, the source reported. According to eyewitnesses, Han told bosses of state-controlled energy firms that further blackouts would not be tolerated.
Government-controlled giants such as State Power Investment Corporation and China Energy Investments echoed Han’s instructions via local social media.
“We will go all-out to fight the tough battle of energy supply,” the nation’s top coal miner CEIC was reported as saying yesterday.