OGUK Gives UK Gas Production Warning
UK gas production will fall 75 percent by 2030 without new investment.
That’s according to industry body Oil & Gas UK (OGUK), which noted that the global gas shortage that sent prices surging again this week is a powerful reminder of the UK’s need to maintain its own North Sea supplies.
On the 5th October, wholesale gas prices rose 37 percent in one day, hitting US$5.44 (£4) per therm in short-term global markets, OGUK highlighted, adding that this was a 700 percent increase compared with more typical levels at the start of 2021.
OGUK cited lower Russian supplies and a surging global demand for LNG as factors causing the latest surge.
The industry body stated that the UK’s own gas fields in the North Sea and Irish Sea have served the nation well, but added that their output is falling, partly because too few new fields have been developed. From self-sufficiency in 2004 the UK can now meet only half its own gas needs, OGUK highlighted, adding that this means the UK is increasingly reliant on imports.
OGUK’s Energy Transition Outlook, which is scheduled to be published later this month, will warn that such reliance will increase unless the UK invests in the new resources under its continental shelf.
“The gas resources off our own shores can boost our energy security and protect jobs,” Deirdre Michie, the chief executive of OGUK, said in an organisation statement. “The UK industry’s own greenhouse gas emissions, generated during production from these new fields, would also be a lot lower than those generated by liquefied natural gas imports,” Ms Michie added.
“The UK and our industry are on a journey to achieve net zero emissions by 2050. We fully support this goal, but 23 million UK homes are still heated by gas, which also generates 40 percent of our electricity, so we will need gas to power us through this green transition. It would be far better to get as much of that gas as possible from sources we can control rather than rely on other countries,” Ms Michie went on to say.
The UK has an annual gas demand of 74 billion cubic metres, with 1,100 cubic metres used, on average, per year by each UK citizen, according to OGUK. Forty-seven percent of this demand is met from domestic production, 31 percent is met from pipeline imports from Europe and the remaining 22 percent is met from LNG imports, OGUK outlined.
In a statement posted on its website late the previous week, OGUK stated that global demand for gas will rise for the next two decades. It added that the UK’s North Sea resources can buffer consumers against future shortages, provided energy firms are able to bring them into production.
On the 27th September, OGUK highlighted that wholesale prices for gas had surged 250 percent since January, with a 70 percent rise since August alone. Ofgem, the government energy regulator, has warned UK consumers to expect an average US$183.50 (£135) rise in home energy bills this winter, OGUK highlighted in an organisation statement at the time.
OGUK describes itself as the leading representative body for the UK offshore oil and gas industry. It is a not for profit organisation which was established in April 2007, which informs, engages and champions the UK offshore oil and gas industry as part of a diverse energy mix, according to its website.
Source: Rigzone