Page 5 - EurOil Week 37 2022

EurOil COMMENTARY EurOil

UK Prime Minister Liz
Truss.

in our energy security and driving bills higher,” developing a site in Lancashire.
Truss said in a statement, pledging to tackle “the “This is an entirely sensible decision and
root causes of the issues by boosting energy recognises that maximising the UK’s domestic
supply.” energy supply is vital if we are going to overcome
Like her predecessor, Truss has pledged to the ongoing energy crisis and reduce the risk of it
boost domestic oil and gas supply. The previous recurring in the future,” CEO Francis Egan said
government announced it would resume off- in a statement.
shore oil and gas licensing rounds this autumn,
ending a three-year de facto moratorium that What next?
began after the regulator said it would review Truss’s government aspires to make the UK an
its policies to check if they aligned with the UK’s energy exporter by 2040, by harnessing both its
climate ambitions. Truss said the licensing round oil and gas reserves and its wind and solar poten-
would kick off as early as this week, with over 100 tial, while also building up nuclear capacity.
licences up for grabs. Time will tell whether such an ambition can be
“New oil and gas licences and investment realised. But what is certain is that the loosening
here in the UK mean that we and our Europe of restrictions on oil and gas development will
neighbours are less likely to have to scramble for take years to yield results.
international supplies or return to using other More offshore licences and more shale gas
fossil fuels, with all the implications that would opportunities onshore will surely mean new
have for cost, emissions, jobs and national secu- projects are developed, but it will take years for
rity,” acting CEO of oil and gas industry lobby this to boost production levels, especially when it
group OEUK Mike Tholen responded. comes to shale gas. As such, the shift in upstream
OEUK also expressed support for managing policy direction that the UK has seen over the
consumer bills for households and businesses. past year will do little to ease the current energy
crisis, but it is nevertheless welcome in terms of
Shale prospects? ensuring the country’s long-term energy secu-
Johnson’s administration had flirted with the rity. Meanwhile, environmental opposition to
idea of lifting a ban on onshore shale gas extrac- new projects, such as the sustained campaign
tion, but said the step would only be considered that likely helped derail the Cambo oil develop-
after an independent geological review had been ment, should become less of a concern to politi-
carried out. Truss has gone further, committing cians eager to show the electorate that they are
to lift the moratorium. doing everything they can to ensure energy in
In reality, lifting the restriction on shale gas the future is more affordable.
projects may prove only symbolic. Even before In the more immediate term, the energy
Johnson imposed the moratorium in late 2019 security of the UK and the rest of Europe will
in a pre-election play to win over voters in the depend greatly on whether Russia cuts gas sup-
north of England, projects were struggling to plies completely, as it has threatened to do if the
make progress because of opposition from local EU introduces its price cap on those supplies,
councils and strict rules about how much seis- and how harsh the winter proves to be. And even
mic activity that results from hydraulic fractur- if Russia continues pumping gas at the current
ing is acceptable. low level, and if there are unusually warm tem-
The government’s announcement has never- peratures over the coming months, energy prices
theless been welcomed by the shale gas indus- are widely expected to remain high for years to
try, including by Cuadrilla Resources, which is come. ™

Week 37 15•September•2022 www. NEWSBASE .com P5