Prime Minister Rishi Sunak is promising that ‘maxing out’ on ‘homegrown’ North Sea oil and gas will lower energy bills, improve energy security and cut imports.

He is right that the UK now imports most of the oil and gas it needs, and this is pushing up energy bills. Over £2 billion leaves our economy every week to buy fossil fuels from other countries. Even just halving our imports of fossil fuels would boost the economy. But the nature of the oil and gas industry means that using ‘homegrown’ supplies is not straightforward.

The best quality oil has already been extracted from the North Sea basin and what is left is low-quality, heavy crude oil. British oil refineries cannot handle heavy North Sea crude as they were built to process lighter oil from Libya, which used to be our main supplier. The North Sea crude is piped ashore and much of it is then shipped by tanker to refineries in the Netherlands, in Europe and even Asia.

A Parliamentary Briefing on Energy Security from 2022 advises that refinery capacity in the UK has fallen by around 30% since 2010, and we do not have the capacity to refine and manufacture the oil products we use, so the UK buys back refined oil at international market prices. The report explains that North Sea oil and gas production is much too small to influence market prices, so any new production will not cut energy bills.

Conservative MP, Alok Sharma also rejected Government claims that North Sea oil and gas contribute to energy security, saying, “The reality is, the oil and gas extracted from the North Sea is owned by private companies – the government doesn’t get to control who they sell to. And the price of oil and gas is set internationally so it won’t actually lower domestic energy bills either.”

According to the oil and gas trade body, Offshore Energies UK, around 80% of North Sea oil production is sold onto world markets and 60% of gas into European markets. The Netherlands and China are the biggest purchasers of UK crude oil.

The North Sea basin is now in severe decline and the quantities of oil and gas produced are diminishing year on year. Offshore Energies UK reports that out of the 284 oil and gas fields currently active in the North Sea, around 180 will have ceased production by 2030 due to natural decline. And opening new fields would supply the equivalent of at most five years of UK oil demand, and one year’s worth of gas.

It is short-sighted to rely on North Sea oil and gas for our future energy security. The faster we can reduce our consumption of oil and gas, the better for our economy. And the way to improve the UK’s energy security and cut bills is to make better use of our abundant and homegrown renewables.