UK must cut demand for oil and gas, before restricting North Sea supplies, say Offshore Energies UK chief executive

The UK must drive down demand for oil and gas rather than undermining its own supplies, Offshore Energies UK’s chief executive has warned in a keynote speech.

David Whitehouse was speaking at the P&J Live venue in Aberdeen for the launch of OEUK’s Business Outlook report. The report is an in-depth analysis of the UK’s current and future energy needs – and how to meet them while also cutting greenhouse gas emissions. OEUK represents 400 offshore oil, gas and wind operators and their supply chain partners.

Whitehouse said cutting demand was essential to reaching net zero, contrasting that with a key finding of the report, that the number of UK homes reliant on gas boilers is actually increasing – even though the government has banned them from being installed in new homes from 2025. A record 1.8 million new boilers are being installed in homes annually, including in new homes.*

The report said: “Household heating is the UK’s second largest use of energy and the largest component of gas consumption … About 85% of homes are heated by gas and National Grid expects the number to continue to rise slowly until 2025. Even the most ambitious scenarios from National Grid see gas being the largest domestic heating source until at least 2032.

“The UK installed around 42,000 home heat pumps in 2021 and has the lowest installation rate in Europe, with householders collectively installing gas boilers 120 times faster than low carbon systems. For context the UK government has set a target of installing 600,000/year by 2028, while National Grid says that 900,000/year (2,466 installations per day) may be needed.

Whitehouse said in his speech: “Today, 76% of the UK’s energy needs are met by oil and gas. Oil powers the 32 million diesel and petrol cars on our roads and gas boilers provide heat and hot water to 85% of homes – over 23 million of them and rising. By 2025 the number of homes reliant on them is predicted to reach 24 million.”

He warned that if the UK wanted to tackle climate change it needed to “get serious” about driving down demand. But while that demand existed it should be met as much as possible from UK resources.

He said: “Almost 40% of our domestic and industrial energy needs are met by natural gas, and the North Sea basin and wider UK Continental Shelf provides close to half of that total. It is only because of this vital resource and our offshore work force that we are not reliant on Russian imports of gas.”

“As together, we build a cleaner future there is no simple choice between oil and gas on the one hand and renewables on the other – the reality is that we need both.”

The report also showed the importance of finding and opening new oil and gas fields, pointing out that 12 new gas fields, opened in just the last five years. now supply 30% of the UK’s gas. Without more and similar investment, it warned, UK oil and gas production could fall 80% by 2035 – putting the UK at greater risk of future energy crises..

Whitehouse said OEUK was committed to net zero – but also to supporting the UK’s energy security. “Achieving net zero will take us many years, a huge amount of work and long-term planning across sectors. We will continue to need domestic oil and gas in those years … But nine out of 10 of North Sea operators are cutting back investment and at least nine major oil and gas operators have publicly confirmed plans to halt or reconsider some project plans for producing oil and gas. Some projects will proceed but not the number we need as a country.

“I am concerned that we are not on the right path for energy security, or for a successful energy transition. We have to change this.”