Open letter: North Sea oil and gas won't help our energy bills or the climate
Dear Prime Minister, Chancellor and Business Secretary,
We write to you as a group of individuals and organisations greatly concerned about the government’s response to the energy price crisis facing the UK, sparked by rising gas prices and the war in Ukraine.
While we welcome more focus on green energy in the forthcoming energy supply strategy, the government’s support for increased North Sea oil and gas production is a dangerous distraction from the real issue facing UK families, which is one of affordability not shortage of supply. New North Sea production will do nothing to lower household energy bills, unlike energy efficiency, but will act as a brake on the UK’s ambitions to transition to a more affordable, cleaner, secure energy supply.
This is the moment to secure our energy independence from all fossil fuels, which are driving conflict, human rights atrocities and climate breakdown around the world. We demand a rapid and just transition to a cleaner, more efficient and affordable energy system for the millions of UK families in fuel poverty and the many more around the world facing the consequences of the climate crisis.
New oil and gas licensing in the North Sea will neither significantly lower energy bills nor provide energy security for the UK
New North Sea oil and gas won’t affect our energy bills. The price of oil and gas produced in the North Sea is set by changes in gas demand around the world and unaffected by any comparatively minor increase in production here. Even the Business Secretary has said, ‘additional UK production won’t materially affect the wholesale market price’ for gas, which has quadrupled in recent months.
New oil and gas takes decades to come on line. It takes on average 28 years to go from discovering a new field to extracting any oil or gas, according to official figures. If the government were to licence a new gas field today, it would likely be 2050 before it produced anything we could use..
UK oil and gas is mainly exported. Currently 80% of North Sea oil is exported because there is little demand from the country’s refineries for UK crude oil. As we entered the gas crisis last year, the UK also exported unusually large amounts of gas for the time of year because the companies that extracted it could get a better price for it elsewhere.
The UK doesn’t ‘own’ North Sea oil and gas. Private companies do. North Sea oil and gas belongs to the licence-holding private companies. Some of these are fully or partly-owned by the Russian, Iranian, Chinese, Norwegian and other governments, who will sell it wherever they can get the best price. Other companies like Shell and BP have no reason to sell it cheaply to UK households and will sell it to the highest bidder.
More oil and gas extraction will destroy any hopes of keeping 1.5 alive or meeting our Net Zero target or global commitments under the Paris Agreement. For a 50% chance of limiting warming to the safest levels possible, there can be no new oil, gas and coal developments, including licences already in the pipeline for approval by 2025. Fast-tracking new oil and gas will do nothing about the gas price crisis but it will have a significant impact on the climate crisis. As the latest IPCC report shows, our window for avoiding climate breakdown is closing.
New North Sea oil and gas production acts as a brake on our shift to cheaper renewable energy: The government needs to signal a clear move away from expansion of North Sea oil and gas production by ending new licensing rounds and field approvals. This will send a strong signal to industry and investors that the UK is committed to a rapid move away from expensive oil and gas. Without this signal, and with its generous state subsidies, the industry will continue to drill for oil destined for export and marginal gas, while doing nothing to solve the UK’s energy security crisis.
The overwhelming majority of oil and gas producers in the North Sea invest nothing in UK renewable energy production. Even the oil and gas majors, like BP and Shell, still invest substantially more in oil and gas production than renewables. Industry claims that the revenue from oil and gas is needed to fund the transition have been undermined by recent decisions by the oil and gas majors to divert the windfall profits they are making from record oil and gas prices into multi-billion pound share buybacks.
Millions of families are already experiencing fuel poverty here in the UK and this will worsen while we continue to rely on destructive fossil fuels and the unstable markets that control them. The government’s Energy Supply Strategy must recognise that:
To lower energy bills, we need to use less gas. Increased energy efficiency is the quickest way to permanently lower energy bills. Heating our homes makes up 23% of the UK’s emissions, while insulating a home can reduce gas consumption by 20%. As we urgently rewrite energy policy to reduce our dependence on Russian gas, the UK government needs to urgently draw up an ambitious, nationwide energy efficiency scheme to retrofit and insulate all homes and reduce energy poverty.
We can quickly increase the UK’s renewable energy capacity. Renewable energy is now the cheapest form of energy we have, and the UK is lucky to be home to some of the best renewable energy resources in Europe. Renewable energy projects can also be brought online much quicker than oil and gas developments. There are over 600 wind and solar projects in the UK that already have planning permission meaning they could be built within a year or two. If they all went ahead, they'd save more gas than we currently import from Russia.
Polluters should help families in fuel poverty. As oil and gas prices skyrocket, energy companies like Shell and BP are making record windfall profits. Instead of leaving millions of people with the unbearable choice between heating and eating, the UK Government must levy a windfall tax on fossil fuel companies to help support struggling families and fund a just transition to renewable energy and insulated homes.
We urge you not to use this horrific moment of conflict to lock in our dependence on more oil and gas but to supercharge the UK’s transition to a cleaner, more efficient and affordable energy system. Doing so will reduce energy poverty, create thousands of good, green jobs, and represent a huge leap forward in our commitment to tackling the climate crisis.