LONDON – Disinformation about UK government subsidies for oil and gas companies continues to spread, according to Tim Eggar, chairman of the Oil and Gas Authority (OGA).
In an op-ed for Britain’s Daily Telegraph, the former Energy Minister pointed out that the sector has contributed £375 billion ($509 billion) in production taxes to date to the UK economy, and currently supports around 200,000 jobs.
He also dismissed recent calls by opposition parties for a windfall tax on offshore operators to soften the blow of rising gas prices to domestic consumers.
“A windfall tax would not have tackled the global supply and demand dynamic that caused prices to spike. It would have weakened industries’ ability to invest in delivering the gas we rely on to heat our homes, but also in the renewable energy projects we badly need to reduce this dependence…
“Gas produced in the UK has less than half the emissions of imported LNG…and enhances our security of supply in an increasingly unstable world.”
The UK has shown a reluctance to tackle demand in the past, he continued, while noting that the same accusation could be leveled at the rest of Europe. “But progress has been made to reduce emissions from our supply since the 1990s…
“Production from oil and gas fields will naturally decline, with associated effects for tax receipts and jobs. But, almost uniquely in the UK, we have the opportunity to repurpose facilities and skills, and to invest in carbon, capture and storage and hydrogen alongside the offshore wind sector.”
Last year, the government and industry agreed to the North Sea Transition Deal, which included a commitment to reduce offshore production emissions by 50% by 2030. “We are using our powers to support UK oil and gas being produced cleanly. Companies are now using our Energy Pathfinder tool to promote supply chain opportunities on offshore wind and CCS projects.
“Many huge challenges lie ahead, including the redrawing of our regulatory landscape, which was not created with energy integration in mind. There are, however, positive examples of what the future could bring. The Scottish government is working on an Innovation and Targeted Oil and Gas decarbonization (INTOG) round for offshore wind projects which would be used to electrify oil and gas infrastructure.”
But to succeed, Eggar concluded, “we need realism, grown-up discussions, commitment from the public and private sectors and strong leadership.”