12 Tuesday December 21 2021 | the times
News
Oil fields may be approved
in North Sea to cut imports
Ben Webster Environment EditorNew oil and gas fields in the North Sea
could be approved under government
plans to take into account “minimising
reliance on imports” when deciding
whether to issue licences.
Yesterday the government published
proposals for a series of tests to meet a
“climate compatibility checkpoint” for
new licences.
One test would consider the balance
between domestic production and
imports. The consultation document
says: “While the UK is working hard to
reduce its consumption of oil and gas, it
is not expected to produce more than it
consumes. This test would address this
issue by favouring a positive checkpoint
outcome while the UK remains a net
importer of oil and gas, subject to other
tests being met, in order to minimise
reliance on imports.”
Emissions from imported liquefied
natural gas are up to three times higher
than domestically produced gas
because of the energy used to liquefy
the gas and ship it here.
The decision is a boost for the oil and
gas industry which has been facing an
uncertain future. Earlier this month
Shell pulled out of the planned new
Cambo oilfield off the Shetland Islands.
Nicola Sturgeon, Scotland’s first min-ister, opposed Cambo because it “could
not and should not pass any rigorous
climate assessment”.
The checkpoint may also include an
assessment of the “global production
gap” between the amount of oil and gas
the world plans to produce and how
much it can burn without breaching an
agreement to limit warming to 1.5C.
The UN has said that 15 big fossil fuel
producing countries were planning to
produce more than twice as much as
would be consistent with 1.5C.
The consultation document said that
considering this discrepancy when de-
ciding on licences “could demonstrate
UK climate leadership” but added that
it was “not evident that this would have
any impact on other producers”.
It said: “It would certainly increase
UK imports over time, particularly of
gas. This could increase overall global
emissions (depending on the source).”
Other tests include assessing oil and
gas companies’ progress in cutting their
operational emissions and developing
technologies such as carbon capture
and storage and hydrogen production.
Greg Hands, the energy minister,
said that the checkpoint would help to
“safeguard the future of this vital UK
industry as we create more opportuni-
ties for green jobs and investment
across the country”.Energy bills for most households in
Britain could soar to a record £2,000 a
year from April as unprecedented
wholesale costs force the regulator to
increase the price cap by more than 50
per cent, experts have warned.
Ministers are understood to be exam-
ining options to try to reduce the scale
of the increase, which is being driven by
a global shortage of gas supplies.
Wholesale gas and electricity prices
across Europe have reached fresh highs
in recent days as cold weather raised
energy demand while low gas exports
from Russia combined with low wind
power generation and nuclear power
plant shutdowns in France cut supply.
UK gas prices rose by 8 per cent to close
at an all-time high of 370.25 pence per
therm last night, according to Icis, the
price reporting agency — more than
seven times higher than typical prices
over the past decade.
More than two dozen UK energy
companies have collapsed and the
multibillion-pound costs arising from
their failure are expected to be re-
couped via energy bills, compounding
the pain of high wholesale costs.
Energy bills for 11 million households
on standard tariffs and four million
households with prepayment meters
are limited by the government’s price
cap, which was introduced in 2019 to
protect customers from “rip-off” prices
and is updated twice a year by Ofgem.
The regulator authorised suppliers to
increase bills by 12 per cent from Octo-
ber, to £1,277 a year for a typical house-
hold on standard tariffs, and is due to
announce in February how much the
cap will rise in April.
Martin Young, an analyst at Investec,
the investment bank, said: “With
wholesale commodity pricesEnergy bills set to
hit £2,000 a year,
households warned
Emily Gosden Energy Editor remaining elevated, we suggest that the
tariff cap could jump by 56 per cent
reaching £2,000 [a year] for the sum-
mer 2022 period.”
He estimated that higher wholesale
costs would account for £560 of the in-
crease with £72 per household to reflect
the cost of supplier failures. He warned
that it would come as “a shock to many,
with implications for discretionary
spend, inflation and fuel poverty”.
The price cap is forcing suppliers to
keep standard tariffs well below the
prevailing cost of energy supplies and
cheap fixed deals have disappeared
from the market. At present Britain’s
two biggest suppliers, British Gas and
Eon, are offering fixed price tariffs
priced at more than £2,500 a year.
Other respected analysts forecast
record-breaking increases. Cornwall
Insight predicted an increase to £1,925 a
year from April. A report by Citizens
Advice earlier this month predicted
that bills could rise to £1,891.
Thomas Rodgers, European gas ana-
lyst at Icis, said wholesale gas prices
were being driven up by “colder-than-
average weather across the Continent
draining already low stocks” in storage.
Gas supplies from Russia have reduced
and cargos of liquified natural gas are
being diverted from Asia to Europe as
traders scramble to secure supplies.
Most of Britain’s power stations burn
gas to generate electricity and high gas
prices have fed through to high electri-
city prices. Low wind power output has
increased reliance on gas plants, which
were generating about 62 per cent of
UK electricity at one point yesterday.
Phil Hewitt, director of EnAppSys,
an energy consultancy, said electricity
prices were high because of “a lack of
wind and colder temperatures” and
that prices for January and February
were already trading at record levels.TRIANGLE NEWSPebble dash
It is a race against
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family who create
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what is to hand on
the beaches of
Devon. Ieva and
Dzintars Slars,
originally from
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Their children, a
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