UK Energy Minister Michael Shanks has rowed back on controversial comments made earlier this month in which he suggested there is “no material difference” between oil and gas produced in the North Sea and that which is imported.
In a letter to the Scottish Affairs Committee published yesterday, Shanks stressed the government’s “strong support” for domestic production, recognising its strategic role in UK energy security, regional employment, and investment.
Writing in a chastened tone to the Committee Chair, the Minister noted “regret” at not having been clearer in his answers to MPs on 2nd July.
The clarification follows fierce criticism from industry, including from Aberdeen & Grampian Chamber of Commerce, who wrote to the Minister earlier this month.
While the Minister maintains in his note that new licences will make little material difference to the natural rate of decline in the North Sea, he sidesteps any culpability for poor policymaking which is accelerating this process. While the natural rate of decline from a mature UCS is around 7% per year, energy experts Rystad have estimated that the actual rate is closer to 20% - a level driven not by geology, but by policy and punitive taxation.