The UK Government was warned again yesterday that the decision to impose a 65% tax rate on the nation's offshore energy providers will do long-term damage to the industry.
It was also reminded that the controversial move raises the risk of future energy shortages.
These messages came from Deirdre Michie, chief executive of Offshore Energies UK, as the trade body made its response to the Government's consultation on the draft bill for the windfall tax.
In a letter sent to Chancellor Rishi Sunak on behalf of the offshore energy industry, OEUK warns that the new tax risks driving away UK oil and gas investment - just when it's most needed to maintain the country’s future supplies.
OEUK also reminded Government that its climate ambitions would not be helped by this cash raid because the fiscal shock of the levy would deter the investment needed to underpin the net-zero transition.
The Government consultation on how the new tax will work closed last night, with many of the UK's offshore oil and gas producers understood to have raised similar concerns as OEUK.
Commenting on the letter, Ms Michie said: "This is a tough tax for our industry, and it could reduce our ability to invest in the UK's future energy supplies just as energy security is moving to the heart of national security.
World at risk
“Right now, the world is at risk of shortages and price rises that will have huge impacts on consumers and on our economy. So we should be doing all we can to maximise our own supplies, not deterring investment with new taxes.
"We all want to move quickly to a cleaner-energy future, but our ambitions must be grounded in realism if we are to avoid dramatically increasing our reliance on imported energy in the short term.
"It's why we continue to raise concerns about the impact of the levy on the UK's energy security, economy and thousands of jobs."
The Government decided to impose the windfall tax on North Sea oil and gas producers to fund help for families facing record energy bills.
The Chancellor also threatened to extend the cash raid to power-plant owners, declaring last month that "certain parts of the electricity-generation sector are also making extraordinary profits".
However, it was reported last week that the Government has now signalled it is cooling on proposals to widen the new levy to include electricity generators.
A source said: "The direction of travel is away from a windfall tax on generators because the sector is just too complex and it could clobber investment...it turns out it's just too complex to work out who has made how much excess profit."
Puzzled and annoyed
This comment has puzzled and annoyed the North Sea oil and gas industry, which feels it is being unfairly targeted by the Government while other sectors escape.
The tax hike could cost the offshore producers £17.5billion between now and 2025.