logo
Oil price volatility concern as North Sea job losses mount

Oil price volatility concern as North Sea job losses mount

'I think it is true when the Prime Minister says energy security is national security,' he said, adding: 'Over 40% of our energy demand was imported last year and I think in an uncertain world, you know that's the wrong place to be.'
The reliance on imports leaves the UK vulnerable to a disruption to supplies, reckons Mr Whitehouse. He claims the country is depriving itself of huge amounts of economic value that are enjoyed instead by countries it buys oil and gas from. Imports may result in an increase in emissions compared to UK sources when related production and transport operations are taken into account.
'If we do it here in the UK that protects jobs, puts real value into our economy and we deliver that with a lower carbon footprint so I think the case for having home-grown oil and gas is compelling,' said Mr Whitehouse.
READ MORE:
As Chevron closes Aberdeen office, what now for North Sea jobs?
Scale of SNP Government climate change failings underlined by experts
Israeli-owned firm takes control of UK's biggest gas field
The oil and gas industry veteran noted that an expert report for OEUK published in June found that up to 7.5 billion barrels of oil and gas could still be produced from UK waters. The figure is around 3.2 bn barrels higher than current government estimates.
OEUK has highlighted the fact that the Climate Change Committee, which advises the Government, has forecast that in a scenario where the UK meets all its climate targets on time homes and businesses will still use between 13 and 15 billion barrels of oil and gas.
The potential additional 3bn barrels production that OEUK thinks is possible could be worth £165 billion to the UK economy in total and support thousands of jobs.
Under Mr Whitehouse's leadership OEUK will focus much of its effort on campaigning for cuts in oil and gas taxes as the Government prepares to publish the results of a review of the fiscal regime.
North Sea firms complain the tax burden has increased significantly since the windfall tax was introduced by the former Conservative Government in 2022. The rate of the energy profits levy has been increased since then, most recently by the Labour Government in the Budget in October.
While the tax was imposed after oil and gas firms posted bumper profits, Mr Whitehouse claimed it has caused lots of damage.
He said one way of highlighting that would be that fact that in 2019 the former Oil and Gas Authority predicted that over 6bn barrels of oil and gas would be produced from the UK North Sea between 2025 and 2050, with over 10bn possible. That compares with the successor North Sea Transition Authority's forecast of around 3.5bn.
'The underlying geology in the North Sea hasn't changed but the environment and the uncertainty has and the windfall tax has played an important role in that, it is deterring investment' claimed Mr Whitehouse. 'As we look forward to the second half of the year we are seeing a rapid drop off in terms of rig activity in the North Sea.'
OEUK chief executive David Whitehouse claims oil and gas firms can play a key role in the development of renewables assets off Scotland (Image: OEUK)
The Government has come under pressure to bring forward the date for the ending of the windfall tax to 2026 from 2030. Chancellor Rachel Reeves gave no ground when she published the results of the key Comprehensive Spending Review in June.
However, Mr Whitehouse hopes that OEUK could still win concessions.
'The Treasury has some very thoughtful mechanisms which mean that in the event that prices spike the tax on the sector would increase,' he observed.
There are details to be considered but OEUK wants the successor regime to be implemented in 2026.
Mr Whitehouse is confident that the resulting boost to activity would allow the Government to recover more revenue than it lost as a result of easing the tax burden.
He noted: 'In a regime where you're paying high tax that is causing investment not to happen … that does reduce your economic growth actually, it also ultimately reduces your tax receipts.'
OEUK welcomed the results of the review of the field development consenting process the Government published this month – although energy minister Ed Miliband's plans to stop issuing exploration licences for new areas is a cause for concern.
The consenting review was launched after a Scottish court ruled the Conservative Government was wrong to approve plans for the controversial Rosebank development off Shetland - because the assessment process failed to take into account the emissions that would result from use of the oil concerned.
Under the Government's plans firms will be required to submit environmental impact assessments in respect of proposed field developments that do consider such emissions.
'We welcome that the guidance has come out, it is an important step to projects moving forward,' said Mr Whitehouse.
The regulatory change could have positive implications for the planned Rosebank, Jackdaw and Cambo developments, all of which are opposed by environmentalists.
READ MORE: North Sea jobs cull looms after blockbuster oil and gas deals
Mr Whitehouse hammered home claims that the UK needs to ensure that it has a strong oil and gas supply chain if it is to make the most of the potential of low carbon energy generation and carbon capture and storage technology to support the net zero drive.
Oil and gas firms have the expertise required to develop offshore facilities such as windfarms and some have shown they are willing to invest directly in developments.
OEUK's membership includes firms that are active in renewable energy generation, hydrogen production and carbon capture and storage. It evolved out of the former Oil and Gas UK.
'If we manage the opportunity right and in a pragmatic way, which is support for oil and gas while we still use it then we see significant opportunities, particularly floating wind, carbon capture,' Mr Whitehouse said.
'I think there's huge opportunities for Scotland the wider UK … not just storing emissions from UK industry but storing them from Europe.'
In June the UK Government confirmed it would provide £200m funding for the Acorn carbon capture and storage project, which will involve capturing industrial emissions and transporting them for storage in depleted North Sea reservoirs. It also announced £500m funding for UK hydrogen projects and a £1bn offshore wind supply chain initiative.
Mr Whitehouse said OEUK very much welcomed the announcements concerned, which should help to generate momentum in the low carbon sector.
However, noting that the number of jobs created in the sector so far has remained lower than expected, he cautioned: 'It is good to have ambition. It is good to set targets. But for those targets we need to make sure that they become real, that … people can feel that there are genuine delivery plans that sit underneath them.'
The prize could be huge if politicians and industry play their parts effectively. That will require people to recognise that the UK will need oil and gas and the related supply chain for years as it builds out the low carbon generating systems it is hoped will eventually meet its energy requirements.
Noting that 90,000 jobs are supported by the oil and gas sector, Mr Whitehouse appeared optimistic about the future despite the concern about the geopolitical outlook.
'I think over the coming decades, I would like to see that integrated energy sector significantly increasing the number of highly skilled, well-paid jobs,' he said. However, the prediction came with the caveat that 'it's that integration that I think is going to be the path to success'.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Impostor uses AI to mimic Marco Rubio's voice and writing
Impostor uses AI to mimic Marco Rubio's voice and writing

The Independent

time33 minutes ago

  • The Independent

Impostor uses AI to mimic Marco Rubio's voice and writing

An impostor used artificial intelligence to mimic Secretary of State Marco Rubio 's voice and writing style. The individual contacted senior U.S. officials and foreign ministers through voicemails and text messages sent via the Signal app. Authorities suspect the impersonation aimed to manipulate government officials to gain access to sensitive information or accounts. The State Department is currently investigating the security breach, with the impostor's identity yet to be determined. This incident occurs amidst broader concerns about the use of encrypted messaging apps for official government communications, following previous security incidents like 'Signalgate.'

Canadian police seize largest ever weapons cache in terrorism inquiry
Canadian police seize largest ever weapons cache in terrorism inquiry

The Guardian

timean hour ago

  • The Guardian

Canadian police seize largest ever weapons cache in terrorism inquiry

Police in Canada have arrested and charged four people, including active military members, who they allege were 'planning to create anti-government militia' and to 'forcibly take possession of land' in the province of Quebec. The scope of material uncovered by police, including explosives and assault rifles, marks the largest weapons cache ever seized as part of terrorism investigation. On Tuesday, the Royal Canadian Mounted Police charged Marc-Aurèle Chabot, 24, of Quebec City, Simon Angers-Audet, 24, of Neuville, and Raphaël Lagacé, 25, of Quebec City, alleging the group took actions to facilitate terrorist activity. 'The three accused were planning to create anti-government militia. To achieve this, they took part in military-style training, as well as shooting, ambush, survival and navigation exercises. They also conducted a scouting operation,' the RCMP said in a statement. A fourth individual, Matthew Forbes, 33, of Pont-Rouge, has been charged with possession of firearms, prohibited devices and explosives. The four have not yet entered pleas. The RCMP said they conducted searches in January 2024 in the province of Quebec, where they discovered 16 explosive devices, 83 firearms, 11,000 rounds of ammunition and other military equipment – 18 months before the arrests were made. Police said the investigation was led by Quebec's RCMP-led Integrated National Security Enforcement Team squad, with help from local police. Other than describing the men as wanting to create an 'anti-government militia', investigators have not described the motivating ideology and nor did they reveal what the men were alleged to have identified as a target in their attempt to 'forcibly take possession of land in the Québec City area'. The RCMP also released images of handguns, assault rifles, vests and ammunition seized by officers. 'This is the largest cache of equipment and weapons and explosive devices that have ever been found in a terrorist incident, by a long shot, in Canada,' said Jessica Davis, a former intelligence analyst at Canada's spy agency and the president of Insight Threat Intelligence, a consultancy. 'I would probably put it in one of the top caches of disrupted plots around the world, particularly in Nato countries. It's huge and we don't know what they were planning on doing with that – but that was a lot of military equipment and devices.' The RCMP also posted images of an accused's social media profile that included images 'with the aim of recruiting new members to the anti-government militia'. Davis said that over the last two decades, most of the terror attacks in Canada have been perpetrated by ideologically motivated violent extremism. 'We're not talking about al-Qaida and Islamic State. We're talking about anti-Muslim, 'Incel' or anti-government extremists. And I think that's one of those things that Canadians don't necessarily understand. The Islamic State makes the news, but it's really this other type of terrorism that's the real problem in this country.' The four men were due to appear in a Quebec court on Tuesday. None of the charges have been tested in court.

Ministers face fresh challenge to welfare reforms in Wednesday votes
Ministers face fresh challenge to welfare reforms in Wednesday votes

North Wales Chronicle

timean hour ago

  • North Wales Chronicle

Ministers face fresh challenge to welfare reforms in Wednesday votes

The Department for Work and Pensions will try to steer the Universal Credit Bill through its final Commons stages, including clause-by-clause scrutiny, on Wednesday. The Bill, if agreed to, would roll out two different rates of benefit for claimants who cannot currently work. It would also freeze the limited capability for work and work-related activity (LCW and LCWRA) elements of the benefit until 2030. The PA news agency understands that a 'substantial number' of Labour rebels have agreed to vote to gut the Bill of these reforms, if they can trigger a division. When MPs debated the reforms last week, Government frontbenchers rolled back on their plan to reform the separate personal independence payment (Pip) benefit, vowing to revisit any proposed changes only after a review by social security minister Sir Stephen Timms. 'The Government for all the goodwill of pulling clause five on Pip, they've lost it over being so stubborn and obstinate over clauses two and three,' Labour MP for York Central Rachael Maskell said. Clause two of the Bill includes a framework for two rates of LCWRA, with claimants who are eligible for the benefit before April 2026 able to claim a higher rate than later applicants. Claimants who are terminally ill or who have severe symptoms of an illness which 'constantly' apply would also be eligible for the higher rate, regardless of when they become eligible. Ms Maskell has proposed a change to the reforms, so that someone who has slipped out of and then back into the LCWRA eligibility criteria either side of April 2026 would still be able to claim the higher rate. Approving this change would be like 'gathering up the crumbs rather than getting the full course meal', she said. Asked what the Government should do to tackle welfare costs, Ms Maskell told the PA news agency: 'We've got to put the early interventions in to take people off this path of ill health. 'We've got quite a sick society at the moment for all the reasons that we know, a broken NHS, you know, social care not being where it should be, and of course long-term Covid. 'All of that is having its impact, and the endemic mental health challenges that people are facing. 'But to then have the confidence that your programme is so good that it's going to get loads of these people into work and employers are going to have to fulfil their obligations in the future hopefully after the Charlie Mayfield report (the Keep Britain Working review) will make those recommendations – all of that, great, as far as it goes. 'But what we can't do is leave those people that can't work in poverty, because they would love to work and earn money, but they can't, so we have to pay for it. 'And therefore the people who've got the good fortune of earning money, whether it's through income or assets, they're the people that are going to have to support a wider society.' Labour MP for Poole Neil Duncan-Jordan proposed gutting the Bill through a series of draft amendments, to strike clause two and cancel the freeze in clause three. He and Ms Maskell were two of 49 MPs who unsuccessfully tried to block the Bill at second reading, when it cleared its first Commons hurdle by 335 votes to 260, majority 75. Amid fears the Bill had been rushed through Parliament, and referring to the Liberal reformer William Beveridge who published a post-war blueprint for the welfare state in 1942, Mr Duncan-Jordan asked: 'Beveridge didn't design the welfare state on the back of a postage stamp, did he?' Beyond changes to parts of the benefit specifically for people who cannot currently work, the Bill would demand an above-inflation rise to the universal credit standard allowance each year until 2030.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store