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April 21, 2022updated 04 Jul 2022 3:18pm

The true cost of the energy crisis: where will Britain turn to?

As the dust begins to settle on the impacts of sanctions against Russia, we look at what the UK’s energy strategy is moving forward, and the emerging route to energy independence.

By Scarlett Evans

In the month since Russian President Vladimir Putin invaded Ukraine, Western governments have been fighting back with a series of increasingly severe sanctions levelled against the aggressor nation. While European regions were initially reluctant to involve the oil and gas sector in these boycotts for fear of causing a complete market meltdown, they have now changed tack to bar all imports of Russian oil and gas, and any associated products.  

The decision has given rise to the question of how the gap left by Russian energy supplies can be filled as Western governments grapple with rising commodity prices and a demand that has been booming since the pandemic’s impacts began to retreat. One solution being pursued by the UK is to seek increased imports from other oil-rich nations to meet the production gap.  

However, exactly where we this oil is sourced from has been a topic of concern, and while the need for energy supplies is increasingly pressing it has raised the question of what will be compromised to ensure this demand is met, and where the hope for the future of energy lies.  

A turn towards Iran and Saudi Arabia 

The decision to sanction Russian imports has worked to exacerbate the pre-existing cost of living crisis in the UK, with increasing energy prices causing household bills to reach unprecedented levels. The need to rebalance the market and ease pressure on consumers is pressing, however the UK Government’s attempts to source new avenues of energy supplies have not been met with universal public approval.  

To replace Russian stocks, the government has turned in part to the resource-rich but historically contentious nations of Saudi Arabia and Iran as primary contenders.   

The recent repayment of a $400m debt to Iran, linked to the release of political hostages Nazanin Zaghari-Ratcliffe and Anoosheh Ashoori, has reopened negotiations over the 2015 Iran nuclear deal. If finalised, sanctions previously levelled against Iran would be lifted, and could unlock some 1.5 billion barrels of Iranian oil.  

While a murky situation, some have said the sudden decision to repay the debt, which the Hague declared as owed to the Iranian Government in 2009 but originally dates back to the 1970s, is not disconnected to the renewed need for Iranian supplies – a stance that has understandably attracted condemnation.  

“Trading blood for oil” 

Similarly, Prime Minister Boris Johnson’s visit to Saudi Arabia in March to discuss increasing oil imports attracted criticism. While ultimately fruitless, the plea to the Saudi kingdom sparked outrage as it came days after the largest state killing in the kingdom’s history, with 81 men executed. According to the UN, half of these men were Muslims from the Shia minority, and were pro-democracy protestors. 

“It is not acceptable to cite Russia’s war crimes to try to justify trading blood for oil elsewhere,” says Jeed Basyouni, head of international human rights charity Reprieve’s Middle East and North Africa team. “It shows the world that we will apply double standards for our convenience, and embolden countries like Saudi Arabia into further atrocities, just as Putin was emboldened by our willingness to take his cronies’ cash for decades.”  

She added:”There are better and more sustainable ways to deal with the energy crisis than empowering these murderous regimes. We cannot show our revulsion for Putin’s atrocities by rewarding those of Mohammed bin Salman.”  

Johnson’s decision to visit the Saudi kingdom also attracted the ire of British MPs, with Labour leader Keir Starmer saying that the Prime Minister was “going cap in hand from dictator to dictator” in what he said was not a viable energy strategy.  

On the other side of the fence is foreign secretary Liz Truss who, speaking on Sky News, said that Saudi Arabia “is not a global security threat in the way that Russia is”, and therefore a more viable option. 

But is it really a question of choosing the lesser of two evils? Or is there an alternative route that avoids dealing with dictators entirely? 

A route to self-sufficiency 

Another option under consideration is ramping up the UK’s domestic oil and gas production. Indeed, pursuing self-sufficiency has never seemed more appealing, with reliance on other nations being evidenced as potentially crippling in instances of conflict.  

“Increasing our reliance on other countries for our energy is not the best option from an energy security, economic, or environmental perspective,” says UK oil and gas regulator OGUK’s market intelligence manager Ross Dornan.  

“The UK will always have some need for imports, as our domestic resources can’t meet the entirety of our demand. But, as the need for oil and gas declines, it’s preferential that we meet as much of our own demand as possible – this supports UK jobs, the UK economy, and ensures we remain in control of our own emissions.”  

The push to improve Britain’s domestic supply has become a matter of national security, with Business Minister Kwasi Kwarteng writing on Twitter: “Putin can set the price of gas, but he can’t directly control the price of renewables and nuclear we generate in the UK.” 

Moving forward, this would mean expanding offshore capacity in the interim before wider adoption of renewable technologies is seen. A new energy independence plan, expected to be published at the beginning of April by the UK Government, is anticipated to include such an initiative – set to include accelerated targets for boosting production of renewables and a renewed focus on North Sea oil and gas. 

Can self-sufficiency be sustainable? 

Using offshore sources and expanding the UK’s North Sea deposits is a key part of this, though increasing oil and gas reliance has naturally given rise to opposition from environmentalists, particularly as ministers are reportedly exploring the possibility of reintroducing fracking as part of this solution. Yet some say it is the only way forward without reliance on foreign imports.  

“If we want to maximise our self-sufficiency, we need to invest in new wells and fields to replace those which are closing,” says Dornan. “We also need the right support and policy in place from the government to make sure diversifying into renewables will be commercially viable for companies in the UK basin, which is what the North Sea Transition Deal will deliver. An increasingly diverse and sustainable energy system is the best way of increasing our energy security.”  

He adds: “Long-term self-sufficiency will come from adopting a mix of low-carbon energy sources like wind, solar, and nuclear, all energies that our industry is already helping to develop, alongside domestic oil and gas production – reducing the UK’s reliance on importing hydrocarbons from other countries.  

While the details of exactly how the UK’s energy independence will be achieved still need to be ironed out – particularly with environmentalists anxious they adhere to hard-won clean energy targets –  standing separate from other nations seems the only true option in terms of energy security, public opinion, and economic benefit.  

Thus far the actions of the government may have come under scrutiny, but it could well win back public opinion with the new energy independence plan and set the tone for a new, domestic-focused energy system.  

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