Energy industry executives say investment must continue in North Sea
A growing crisis over gas prices, energy supplies and food shortages are strengthening the case for continued investment in the North Sea, industry executives say.
A surge in wholesale gas prices has affected the production of carbon dioxide, which is vital for the production and transportation of supermarket staples such as bread and meat, as well as beer and soft drinks.
Two of England’s largest fertilizer factories in Teesside and Cheshire – which use the gas to produce ammonium nitrate – have closed.
UK Business Secretary Kwasi Kwarteng has held talks with energy suppliers and regulator Ofgem to find a solution to the problem.
Oil and gas group OGUK said the crisis had shown why it would be premature to stop investing in the North Sea and that would leave the UK at the mercy of imported energy.
A debate has raged in Holyrood parliament over the Scottish government’s commitment to the North Sea since the SNP entered into a partnership with the Green Party which promotes a faster dismantling of the fossil fuel sector.
Kwasi Kwarteng: meeting the gas suppliers
The industry says the latest highlight of the factors shows why it would be unwise to cut supplies to Britain.
Wholesale gas prices have jumped 250% since January with an increase of 70% since August alone. The causes are global – European gas stocks are declining, supplies from Russia have declined and there is a strong demand for liquefied natural gas from Asia.
The effects on the UK are however particularly strong as it is one of the biggest consumers of gas in Europe, with 44 billion cubic meters per year, mainly for domestic and industrial heating.
, and at the mercy of global events over which we have no control.
“As the UK continues to use oil and gas, we must make the most of the resources under our control while working for a low carbon future. ”
Commenting on the closure of factories producing vital supplies for the food industry, Nick Allen, Managing Director of the British Meat Processing Association, said: “It was a huge shock, it happened so quickly.
“I think everyone in the industry is outraged that these fertilizer factories can shut down without any warning and suddenly take something that is so essential to the food supply chain like that.
“We really need the government to step in now and do something. “