Energy: £350 billion shot in UK economy’s arm

£350 billion shot in UK economy’s arm on the table with oil & gas and other homegrown energy

With forecasts indicating that the United Kingdom (UK) will need billions of oil and gas barrels by 2050 amidst the ongoing economic challenges and energy market headwinds and tailwinds, Britain’s trade body for the offshore energy industry, Offshore Energies UK (OEUK), has outlined in its new report the roadmap that will enable Britain not only to meet the power demand with energy produced at home but also inject hundreds of billions into its economy by allowing oil and gas to thrive alongside low-carbon and clean alternatives in its energy toolbox.

Offshore Energies UK’s ‘2025 Business Outlook’ report spotlights the path the UK is being urged to take to unlock energy reserves, which could curtail its dependence on imports and boost economic growth. OEUK claims that the UK could produce at home half of the 13-15 billion barrels of oil and gas the nation is projected to need by 2050 under the right business conditions.

According to Britain’s trade body, such a move would add up to £150 billion of gross value to the UK economy on top of the £200 billion from planned production, resulting in around £350 billion in total to safeguard energy security, jobs and lower carbon emissions alongside an acceleration of renewables.

OEUK’s report comes after the independent Climate Change Committee estimates, which indicate the UK will require 13-15 billion barrels of oil and gas by 2050, the target date for the economy to achieve net zero. While Britain is on track to produce 4 billion of these barrels, the report finds that another 3 billion barrels could be produced at home to meet half of the UK’s needs with the right polices to encourage firms to invest, rather than increasing its reliance on imports.

Furthermore, the report’s findings indicate that by 2050, when UK electricity demand has more than doubled, oil and gas will still form a fifth of UK energy needs. As a result, the cost of energy is seen as critical to wider industrial strategy and economic success. With this in mind, OEUK concludes that maintaining homegrown gas supplies is key for the UK’s industrial base.

This business outlook coincides with government consultations with the industry on the future of the North Sea and the oil and gas fiscal regime. In the coming months, the trade body notes that interlinked decisions are also expected on the UK government’s Comprehensive Spending Review and new Industrial Strategy, as well as updated environmental guidelines for oil and gas projects.

Source: Off-Shore Energy