Oil and Gas UK has welcomed the UK-Govt’s draft Energy Bill, which formally constitutes the new Oil and Gas Authority.
The association’s chief executive, Deirdre Michie, said: “The OGA is a critical catalyst for the work being done to sustain offshore activity.
“We look forward to receiving further details of this new legislation when the Bill is published, that will complete the implementation of Sir Ian Wood’s recommendations for MER UK – Maximising Economic Recovery from the UK continental shelf, in addition to providing the full set of tools and capabilities that the new regulator will need to do this job effectively and efficiently.
“We hope Government will bring forward this legislation as soon as possible. “We are at a critical stage in the history of UK offshore oil and gas development and bold steps need to be taken now to ensure strong activity continues into the future.
“We are dedicated to working with the OGA and HM Treasury, forming a tripartite approach to maximising economic recovery of the UK’s substantial remaining oil and gas reserves – as recommended in the Wood Report and agreed by all major parties – to bring through the changes that are so urgently required.”
The Draft Energy Bill states:
Investing in domestic oil and gas production is important because it helps reduce our reliance on imports of oil and gas. In 2014 oil produced from the N. Sea was equivalent to around 56% of UK oil demand, and domestic gas was similar.
This approach ensures our resilience to energy disruption is improved and helps make a significant contribution to our economy. Oil currently constitutes 41% of the UK energy mix and is the main energy source for transport (97%).
Gas constitutes around 34% of the UK energy mix and is an important fuel in domestic and commercial heating, industrial processes, and electricity generation.
Given the right business conditions which promote investment, the UK’s oil and gas industry can continue to supply a significant proportion of our needs to 2020 and beyond.
The Government is also working with National Grid to put in place an effective plan to secure electricity supplies. We will continue to reform the electricity market to ensure the necessary investment is made to transition to a low carbon electricity system at the lowest cost to consumers, whilst maintaining security of supply.
In the medium term, the capacity auction mechanism will ensure we have enough capacity on the system to meet peak demand.
To ensure our energy security, we are also investing in new energy infrastructure such as new nuclear and new renewables, as well as exploring for gas.