Business Secretary Kwasi Kwarteng has said the government remains committed to North Sea fossil fuel, and will invest further in domestic oil and gas sites.
He argued domestic energy sources were crucial as the UK pivots from Russian oil imports and to a greener future based on renewables.
In his view, stable fossil fuel supplies were key to meeting consumer demand as the country transitions to less environmentally damaging energy sources.
Kwarteng said: “We must end our dependence on all Russian hydrocarbons. In the meantime we need more investment in North Sea oil and gas production as we make the move to cleaner and cheaper power. Turning off domestic product at this moment would be completely the wrong thing to do. We are not going to do it.”
Kwarteng also stated that UK supplies remained secure amid renewed concerns over disruption following Russia’s invasion of Ukraine.
He said: “The UK is a significant producer of crude oil and petroleum products. We have resources in place the event of supply disruption.”
He also revealed, following the oil ban, that the UK is also looking at potential plans to cut itself off from Russian natural gas.
Currently, the UK only depends on Russia for around eight per cent of its crude imports and four per cent of its gas supplies.
By contrast, around half its fossil fuel supplies are sourced domestically.
However, as both gas and oil markets are global and integrated, the UK will still feel the affects of soaring prices even if its own supplies are stable.
Gas prices have climbed to record highs since Russia invaded Ukraine, spiking at £8 per therm last week, while oil rallied to a 14-year-peak of $139 per barrel on Monday.
This has raised fears the price cap could skyrocket to an eye-watering £3,000 per year in October, although Kwarteng said “we simply don’t know” if energy bills will be hiked in August.
However, Ofgem boss Jonathan Brearley suggested yesterday a price rise was “almost inevitable”, while Investec, Goldman Sachs, Cornwall Insight, and Energy UK have all forecast a painful 50 per cent further increase in the cap this winter.
The Business Secretary gave further details on a new task oil task force – first announced yesterday when he announced the phasing out of Russian oil this year.
He revealed the task force will team up with the US, Netherlands and the Gulf to ensure alternative supplies of fuel products exist for businesses and consumers.
When questioned about fracking, he did not rule out a U-turn on the process after the government imposed a moratorium on the practice in 2019 and the oil and gas authorities ordered Cuadrilla to plug and abandon the UK’s two remaining sites.
He said: “The government has always been clear that we will take a precautionary approach that supports shale gas exploration if it can be done in a safe and sustainable way. That remains our position, and we will be evidence-led. This is what we wrote and said in 2019, and we are still committed to that.”
Kwarteng will also attend an extraordinary meeting of G7 energy ministers later this week, while Prime Minister is expected to set out a long term energy strategy in the near future.
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