Why the loss of North Sea oil is a disaster for Britain

Decommissioning is the new name of the game, despite an estimated 25 billion barrels of untapped oil. Photo: Igor Alekseev/iStockphoto

Far In the North Sea, an abandoned but huge oil platform awaits its fate. Brent Charlie is the last remnant of the Brent field, a resource so large it once supplied a third of the UK's daily oil needs.

Discovered in the 1970s, the Brent field at one point produced 184 million barrels of oil. oil a year, earning billions for Shell, its owner, plus £20 billion in tax revenue for the Treasury. It was so large that four massive platforms were required to mine its riches: Brent Charlie, Alpha, Bravo and Delta.

Today, Alpha, Bravo and Delta are gone, torn from their supports and sent to the scrapyard.

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Later this year, Brent Charlie will also have his legs cut off and lifted onto the Pioneering Spirit — a giant. a ship specially designed to destroy dilapidated oil and gas installations.

The Pioneering Spirit and its growing fleet of similar oil rig kill vessels are set for a busy few years. Hundreds more oil and gas installations are going silent in the waters around the UK. Fifty years after the North Sea began to flourish, the final decline awaits us.

In addition to transporting disused drilling rigs to shore, the nearly 8,000 wells drilled deep into the seabed must also be plugged.

The decline of the North Sea has implications not only for energy policy and tax revenues, but also for public finances more broadly.

We face a huge bill — potentially up to £60 billion — to clean up the North Sea.

We face a huge bill — potentially up to £60 billion — to clean up the North Sea.

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Energy companies are responsible for decommissioning, but tax breaks mean much of this money will be returned to the Treasury and ultimately taxpayers.

Last year alone, more than 200 oil and gas wells were plugged, eight platforms were removed, 8,000 tons of underwater structures were removed from the ocean, and another 250 km of seabed pipelines were decommissioned. A further 180 of Britain's 284 oil and gas fields will close by the end of the decade.

The mass closures are not the result of environmental protests or lack of demand.

The supply is also not decreasing. The equivalent of 47 billion barrels of oil has been produced in the past five decades, but seismic surveys suggest there are still 25 billion left.

Instead, operators blame punitive taxes for the rapid decline in production, and some face levies . more than 100% of their profits.

Production is now in rapid decline.

Data from the North Sea Transition Authority (NSTA), the government regulator, shows UK oil production peaked at 150 million tonnes of oil per year in 2000, around double the country's consumption. We also produced about 108 billion cubic meters of gas — about 20 billion more than we consumed.

Exports, jobs and taxes rose. The oil and gas industry employed 500,000 people directly or in its supply chains, and its products were the main fuel powering not only our homes and vehicles, but the entire UK economy.

Over the five decades to 2020, the offshore industry contributed around £400 billion in taxes to the Treasury coffers.

The contrast with today could hardly be greater. Last year the UK produced just 38 million tonnes of oil, down 74 per cent from peak levels and around 20 million tonnes less than we need. Gas production amounted to 30 billion cubic meters — less than half of our needs.

Employment fell to 130,000. The same thing happened with taxes, amounting to about 3 billion pounds sterling.

Meanwhile, the UK's dependence on oil and gas has remained virtually unchanged. We still get 75% of our energy from oil and gas, just like we did two decades ago.

Fossil fuels may contribute to a warming climate, but they are also needed to heat the 27 million homes that use gas or oil boilers. About 30 million cars still run on diesel or gasoline, and gas-fired power plants provide more than a third of our electricity.

We still consume 77 billion cubic meters of gas per year, or 1,100 cubic meters per person. volume 14 double-decker buses. We also consume about 60 million tons of oil — almost a ton per person. Imagine several tanks of oil for every citizen, including children.

Whatever the green lobby claims and what politicians promise, the fact remains that the UK remains a fossil fuel country.

Will this change? Fossil fuel consumption has fallen slightly and should fall faster if the government can convince us to install heat pumps, buy electric cars and change our lives in all the other ways necessary to achieve net zero.

But what is becoming all too obvious to everyone is that our consumption of fossil fuels will never fall as fast as the decline in our North Sea reserves.