Latest news with #NorthSeaTransitionAuthority
Yahoo
23-05-2025
- Business
- Yahoo
Labour's tax raid to trap 1.5bn barrels of oil and gas under North Sea
Labour's windfall tax on oil and gas producers will leave 1.5bn barrels of oil and gas stuck in abandoned North Sea oil wells, according to new analysis of the levy's impacts. The predicted output between now and 2050 has fallen 40pc from 3.6bn barrels of oil equivalent to just 2.1bn barrels, according to a report from investment bank Stifel. The findings are based on data supplied by the North Sea Transition Authority (NSTA), the Government's oil and gas regulator. The slump in expected output comes after a surge in the number of companies abandoning productive wells, following Rachel Reeves's decision to extend the tax on oil and gas profits to 78pc. Ed Miliband, the Energy Secretary, has also banned new drilling. Christopher Wheaton, a Stifel analyst, warned that the tax take from oil and gas was also set to plummet, partly because of declining production volumes but also because the price of oil has fallen so far that there is no longer a windfall to tax. The report said: 'The UK North Sea industry is being destroyed by taxes that are too high, taxes which threaten energy security, jobs, investment and economic growth. 'The impact of lower investment and production is already being felt through job losses, lower tax receipts and more energy imports. 'The Office for Budget Responsibility's current forecast for North Sea tax receipts to 2030 is £10bn too high due to declining production and lower energy prices.' The forecast represents a potential headache for Ms Reeves, the Chancellor, who has left herself only a narrow margin to meet her fiscal rules and is already borrowing more than forecast. The UK has about 280 oil and gas fields that last year produced 29bn cubic metres of gas and 28m tonnes of oil. These amounts were lower than a decade ago when the UK produced 38bn cubic meters of gas and 38m tonnes of oil. The reduction has largely been driven by natural decline but experts have warned that recent tax raids on the sector have accelerated the North Sea basin's demise. The NSTA's 2023 production forecasts said that the UK would produce oil and gas equivalent to 46m tonnes of oil in 2028. But its latest forecasts, just issued, downgrade that to 40m tonnes, falling further to 33m tonnes in 2030. By 2040, the NSTA predicts the UK will be producing just 9m tonnes of oil and 4bn cubic metres of gas – way below what the country will still need by then, meaning more imports. The fresh forecasts suggest the windfall tax, or Energy Profits Levy, has roughly doubled the rate of decline. Robin Allan, the chairman of Brindex, an offshore industry trade body, said: 'An accelerated decline of North Sea output will see UK dependency on imports reach more than 85pc by 2030. The windfall tax is self-defeating and it should be removed.' The tax was first proposed by Labour in opposition but was adopted by the then Conservative government under Rishi Sunak in 2022 in response to the surge in oil and gas prices caused by the Ukraine conflict. Mr Sunak initially said it would only remain in place while the windfalls lasted. However, he and then Labour subsequently decided to retain it until 2030, even though oil prices have fallen from a peak fo $139 a barrel to about $60 now. Offshore operators say the tax is so high that there is now more incentive to decommission productive wells and claim the associated tax rebates than to expand production. Serica, one of the largest UK operators, separately warned on Thursday that Ms Reeves's windfall tax and Mr Miliband's ban on new exploration was killing off the UK industry. David Latin, Serica's chairman, said: 'The impact of the inappropriate fiscal environment, and the years of uncertainty, is taking a heavy toll. UK production fell 5pc in 2024, drilling activity is at a record low, 10,000 jobs have been lost and companies continue to exit the UK North Sea. 'All of this will reduce tax receipts going forward and, given demand which will not go away any time soon, lost production will have to be imported – imports which are worse for the environment since they involve significantly increased emissions.' A government spokesman dismissed criticisms, saying: 'The Government has reformed the Energy Profits Levy to support investment and give industry certainty and stability. 'We are delivering a fair and orderly transition in the North Sea, with the biggest ever investment in offshore wind and two first-of-a-kind carbon capture and storage clusters.' The Conservatives, the original architects of the tax, said the political consensus on the windfall levy was gone forever. Andrew Bowie, Conservative shadow energy spokesman, said: 'The report shows in the starkest terms what many have been warning about for months if not years – that the windfall tax is killing the North Sea oil and gas industry. 'Up to 10,000 people have already been laid off with 250 in the last weeks alone. And the new jobs promised in renewables just do not exist yet. Labour must think again and speed up any future fiscal arrangement for the North Sea before we see an entire industry disappear.' Richard Tice, energy spokesman for the Reform Party, said: 'A Reform government would encourage people in the oil and gas sector to get ready to explore when we win the next general election. We are urging them to have new licences ready to approve on an accelerated timeframe.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Powys County Times
25-04-2025
- Business
- Powys County Times
Fact check: Shipped liquid gas is more carbon intensive than UK gas
In Parliament an MP said that importing liquefied natural gas (LNG) has net emissions which are up to four times higher than those for North Sea gas. 'I remind the House that, for example, importing liquefied natural gas involves cooling gas to 160 degrees below zero, shipping it thousands of miles from Qatar and regasifying it at a port in this country,' he said. 'The net emissions are up to four times higher than those from North Sea gas.' Evaluation This only measures the emissions from the production and transport of liquefied natural gas. These production and transport emissions are around four times higher than those from domestically produced gas, according to an official report. However more significant emissions come from burning the gas. If this is taken into account then carbon emissions from LNG are only around 17% higher than those from domestic gas. The facts As was said in Parliament, LNG needs to be chilled until it is in liquid form, then put on a ship and transported from the country of origin to the final place where it is to be used. This is a much more energy-intensive process, so leads to considerably higher emissions. A report from the North Sea Transition Authority (NSTA) found that 'the average carbon intensity of imported Liquefied Natural Gas (LNG) is almost four times the carbon intensity of UK production'. But that report only measures emissions from the production and transport of the gas, not from its combustion, which is the main source of emissions from gas. To find the full difference in emissions between LNG and British gas, one must therefore add the emissions that are produced when the gas is burned by the end user. The International Energy Agency says that natural gas combustion results in 320 kilograms (kg) of carbon dioxide (CO2) per barrel of oil equivalent (boe). The NSTA report found that the transport and production emissions for domestic gas was 21 kg of CO2 per boe, and for LNG it was 79 kg. So the total CO2 emissions for transport, production and combustion of domestic gas would be 341 kg per boe, compared with 399 kg for LNG. That means that emissions for LNG are 17% higher. Links
The Independent
25-04-2025
- Business
- The Independent
Fact check: Shipped liquid gas is more carbon intensive than UK gas
In Parliament an MP said that importing liquefied natural gas (LNG) has net emissions which are up to four times higher than those for North Sea gas. 'I remind the House that, for example, importing liquefied natural gas involves cooling gas to 160 degrees below zero, shipping it thousands of miles from Qatar and regasifying it at a port in this country,' he said. 'The net emissions are up to four times higher than those from North Sea gas.' Evaluation This only measures the emissions from the production and transport of liquefied natural gas. These production and transport emissions are around four times higher than those from domestically produced gas, according to an official report. However more significant emissions come from burning the gas. If this is taken into account then carbon emissions from LNG are only around 17% higher than those from domestic gas. The facts As was said in Parliament, LNG needs to be chilled until it is in liquid form, then put on a ship and transported from the country of origin to the final place where it is to be used. This is a much more energy-intensive process, so leads to considerably higher emissions. A report from the North Sea Transition Authority (NSTA) found that 'the average carbon intensity of imported Liquefied Natural Gas (LNG) is almost four times the carbon intensity of UK production'. But that report only measures emissions from the production and transport of the gas, not from its combustion, which is the main source of emissions from gas. To find the full difference in emissions between LNG and British gas, one must therefore add the emissions that are produced when the gas is burned by the end user. The International Energy Agency says that natural gas combustion results in 320 kilograms (kg) of carbon dioxide (CO2) per barrel of oil equivalent (boe). The NSTA report found that the transport and production emissions for domestic gas was 21 kg of CO2 per boe, and for LNG it was 79 kg. So the total CO2 emissions for transport, production and combustion of domestic gas would be 341 kg per boe, compared with 399 kg for LNG. That means that emissions for LNG are 17% higher.
Yahoo
26-03-2025
- Business
- Yahoo
NSTA revises UK North Sea oil investment and output outlook
The UK's North Sea oil and gas regulator, the North Sea Transition Authority (NSTA), has increased its investment and production forecasts for the coming years after 2024 figures exceeded expectations. The NSTA reported that capital expenditure (capex) reached £5.95bn ($7.7bn) last year, significantly surpassing an earlier projection, reported Bloomberg. Although this year's investments are expected to decrease to £4.8bn, they remain well above previous forecasts following the Labour Government's tax increase on the industry. Companies have expressed concerns over high taxes and policy uncertainties, prompting some to consider projects elsewhere, the report said. Oil and gas investments in the UK North Sea are being closely monitored as the government consults on the basin's future. The NSTA's revised forecasts are based on updated industry data. Offshore Energies UK, an industry lobby group, noted that last year's surge in upstream investment resulted from significant oil and gas developments advancing over recent years. The NSTA also slightly increased its estimates for the UK's oil and gas output, with producers pumping 1.09 million barrels of oil equivalent (mboe) per day last year, 20,000 barrels more than forecast in October. In a related development, a Scottish court recently overturned the UK Government's approvals for two North Sea oil and gas projects, requiring a fresh review. The court of session in Edinburgh ruled that the approvals for Shell and Equinor's projects were unlawful due to the failure to consider downstream emissions from the extracted oil and gas. In December 2024, Equinor Energy announced a new oil and gas discovery at the Ringland prospect in the North Sea, within production licences PL 923/923B. Located approximately 17km west of the Troll field in water depths of 304m, preliminary estimates suggest the discovery could hold reserves of between 2mboe and 12mboe. "NSTA revises UK North Sea oil investment and output outlook" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Telegraph
23-02-2025
- Business
- Telegraph
Miliband accused of playing into hands of Putin with plan to concrete over Britain's last gas wells
Ed Miliband has been accused of 'playing into Vladimir Putin's hands' as he waves through a plan to plug Britain's only shale gas wells with cement. The Energy Secretary has given the green light for plans to permanently decommission the fracking sites which are said to contain enough energy to power the UK grid for decades. But on Saturday senior parliamentarians made an eleventh hour push to save the gas reserves in Lancashire as cement mixers arrived on site. In a letter to Mr Miliband, the collection of shadow ministers, Conservative MPs and peers and one Labour MP warned that 'in today's volatile world, we should not be abandoning Britain's natural energy assets so flippantly'. They said the plans would weaken Britain's chances for energy independence and should be abandoned in the face of growing threats from Russia. They described the move as 'an attempt to prevent any future Government from using these resources if they wished to do so either as a matter of policy or in an emergency'. The North Sea Transition Authority, an arm of Mr Miliband's department, has ordered the decommissioning of Britain's two shale wells by June with work expected to begin this week. In February 2022 an identical plan was blocked by Boris Johnson's government when Kwasi Kwarteng, the then energy secretary, intervened. Mr Kwarteng said at the time that it ' did not necessarily make any sense to concrete over the wells'. Yet Mr Miliband has given no indication that he will stop the process, which critics say is motivated by 'blind ideology'. Earlier this month another giant gas field was discovered under Lincolnshire. The news prompted Mr Miliband to double down on his commitment to permanently prohibit fracking in the UK. Lord Mackinlay, chairman of the Net Zero Scrutiny Group and organiser of the letter, told The Telegraph: 'The recent discovery in Lincolnshire should remind people of the madness of Red Ed's sacred Net Zero. 'He is choosing to leave vast reserves of natural gas untouched at a time when our energy prices are the highest in the world. 'Salting the earth by concreting these wells shuts off a vital resource in very uncertain times, playing into Vladimir Putin's hands exactly at a time when we need to be strengthening our energy security.' The Conservatives indefinitely banned fracking in 2019 on safety grounds following concerns about earth tremors near the gas wells. 'World is in a dangerous and unpredictable place' During her short stint as prime minister, Liz Truss lifted the ban but it was reinstated by Rishi Sunak. The two wells at Preston New Road, owned by Cuadrilla, were the only sites created in Britain before the ban came into force. In their letter to Mr Miliband, the opponents of the concrete scheme said: 'We have very little idea how 2025 will pan out. The world is in a dangerous and unpredictable place. At the very least, the Government should instruct the NSTA to revoke the plugging and abandonment order, as was done in 2022. 'If this concreting order goes ahead and Britain's only shale gas wells are destroyed, the British public will be left in no doubt that this is an ideological Government that prioritises an extreme net zero agenda and ideological purity rather than this country's national security and people's bills.' The signatories include former home secretary Suella Braverman, former deputy prime minister Oliver Dowden, Sir Iain Duncan Smith, and the shadow ministers Greg Smith, Andrew Rosindell and Caroline Johnson. Some 80 per cent of UK homes use natural gas for their heating. Mr Miliband is also pushing forward a transition from gas boilers with government plans to install heat pumps in all new homes by 2027. In its manifesto, Labour said it would use 'our abundant natural resources to free ourselves from the manipulations of Vladimir Putin and petrostates'. Francis Egan, the CEO of Cuadrilla Resources, said: 'The Energy Secretary is instructing us, at a time of heightened global volatility, to fill up Britain's only two viable shale gas wells with concrete. 'I just don't see how this is rational, not least given how much gas the UK imports and how reliant on Russian gas the EU is. 'A future government may want us to use these critical national assets so I don't think we should be making irrevocable decisions based on ideology. 'If we're serious about standing up to Putin, we should be leading Europe away from reliance on Russian gas, not pouring concrete into the British countryside.' Despite the pleas, a spokesman for Mr Miliband's department said: 'We intend to ban fracking for good and make Britain a clean energy superpower to protect current and future generations.'
