24th Mar 2026 02:33
(Alliance News) - The UK "urgently" needs to produce more domestic oil and gas from the North Sea, an industry body has claimed.
Analysis from Offshore Energies UK found that using North Sea gas has a lower emissions footprint than liquefied natural gas from overseas.
A new OEUK report has called on the UK Government to back domestic oil and gas alongside renewables to secure energy supply, including drilling in the North Sea.
The business outlook report 2026 on the UK's offshore energy system claims the UK will continue to need significant volumes of oil and gas for decades to come, even with accelerating use of renewables.
The report warns that without more domestic production the UK risks becoming increasingly reliant on energy imports at a time of rising global instability.
Offshore wind, carbon capture and hydrogen production will have expanding roles, but oil and gas still supply around 75% of the UK's current energy needs and are expected to meet around a fifth of demand in 2050, the researchers found.
The report warns that maintaining domestic supply is essential for energy security, affordability and reliability.
It also said that North Sea gas has a lower emissions footprint than LNG from overseas, supports high-value jobs and reduces exposure to volatile global markets.
Enrique Cornejo, director of energy policy at OEUK, said the trade body is still considering climate targets while pointing to the UK's need for domestic oil and gas.
Cornejo said the UK was "pushing the problem elsewhere".
He said: "We are continuing to support the development of renewable energies, we think that's important.
"However, our position remains the same; for as long as the UK needs oil and gas, it makes sense to produce as much of that here."
He continued: "Our position is, obviously, climate change is important, and what we're setting out here is that there is a pathway to meet climate targets that makes a responsible use of our homegrown resources, and that also ensures that we do not offshore those emissions to other countries.
"Because of how accounting of carbon emissions works for every country, it would be very easy for us to just say we will not produce our energy in the UK, or we will not produce our steel in the UK, and we're just pushing that problem elsewhere."
Current projections suggest the UK could rely on imported LNG for more than a quarter of its gas supply by 2030 and almost half by 2035, up from around 14% last year.
However, OEUK analysis showed that with the right investment conditions and support for pragmatic energy policies, LNG reliance can fall to 6% in the same year.
The OEUK also said replacing the temporary energy profits levy in 2026 with the permanent oil and gas price mechanism could unlock up to GBP50 billion of additional capital investment in oil and gas.
David Whitehouse, chief executive of OEUK, said the UK "urgently" needs a greater supply of domestically-produced energy.
He said: "This is not an either renewables or oil and gas scenario. We urgently need greater supplies of secure, domestically-produced energy including oil and gas, which will remain a critical part of the UK energy system and economy for decades.
"As demand rises and electricity use accelerates, weakening domestic supply would only increase our reliance on imported LNG, leaving consumers more exposed to global volatility and higher emissions.
"Recent events have shown how quickly energy markets can tighten and how easily cargoes can be diverted away from the UK when other buyers bid higher. Energy security means backing homegrown oil and gas alongside renewables.
"To unlock investment, the UK needs a permanent tax regime that gives confidence to investors while protecting taxpayers when prices spike. The Government's proposed oil and gas price mechanism provides that balance.
"Implementing it is essential to reduce reliance on volatile imports, protect skilled jobs and supply chains, and ensure the UK can decarbonise while keeping energy secure and affordable."
A UK Government spokesperson said: "Issuing new licences to explore new fields cannot give us energy security and will not take a penny off bills.
"Regardless of where it comes from, oil and gas is sold on international markets, which set the price for British billpayers – making us a price taker.
"The only way to truly protect ourselves from these price spikes is to get off the rollercoaster of fossil fuel markets."
Climate Action and Energy Secretary Gillian Martin said: "We remain clear in our support for Scotland's valued oil and gas sector, recognising the important contribution the North Sea continues to make to the energy system.
"But the maturity of the North Sea basin means that we need to also focus efforts on a just transition to new long-term opportunities for this highly-skilled workforce.
"We need to see a parallel track approach to the energy transition, in which North Sea oil and gas production is managed alongside the increasing deployment of renewables.
"We are calling on the UK Government for an immediate end to the energy profits levy and a fair future fiscal regime, to help ensure there is a transition that protects jobs and skills, and delivers a pipeline of future investment."
By Rachel Keenan, Press Association Scotland Politics Reporter
source: PA
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