The very best way to shelter ourselves from the kind of price volatility we are now seeing is to pursue net zero.
Weaning the UK off fossil fuels, not more drilling in the North Sea, is the best way to protect consumers from high energy prices, climate advisers have said.
The UK Government has faced calls from some quarters to boost domestic production of oil and gas, including from the North Sea and even by restarting efforts to roll out fracking, to address the soaring price of energy and fuel.
But its advisory Climate Change Committee (CCC) warned those “advocating a new oil and gas bonanza in the UK” that high oil and gas prices are driven by global markets and increasing UK fossil fuel extraction would have virtually no impact on bills.
Investors
The CCC also said granting new licences for exploration was not likely to lead to production for several decades, by which time the UK needs to have slashed its use of oil and gas significantly to meet its climate targets.
The best approach to reducing consumers’ exposure to volatile prices is to cut demand for fossil fuels, through home insulation, heat pumps, electric vehicles and developing more wind and solar power, the advisory committee urged.
It pointed to estimates that showed if David Cameron’s promise to “cut the green crap” had not reduced energy efficiency improvement rates from 2012, and plans to make homes greener in 2016 had not been halted, people’s bills would be £40 less than they will be in April.
And if the Government’s target to have 40 gigawatts of offshore wind by 2030 were in place today, it would save a further £100 off bills.
The committee also said a commitment to no new oil and gas fields would boost the UK’s diplomatic efforts to push for stronger global climate action – and send a “strong message” at home to consumers and investors.
Domestic
But the committee stopped short of recommending the Government call a halt to oil and gas development in the North Sea, acknowledging there was uncertainty about the climate impacts of such a move.
And it said there are other issues such as energy security that are beyond its remit, which ministers must balance up in making a decision.
In a letter to Business Secretary Kwasi Kwarteng, the committee does say it supports a tighter limit on production, with stringent tests and a presumption against exploration.
The committee set out its views in response to a Government consultation on a potential “checkpoint” with tests to assess new oil and gas licences for whether they are compatible with the UK’s climate objectives.
The CCC said emissions associated with extracting oil and gas in the UK were lower than global averages, which could mean domestic supply would be cleaner in meeting ongoing need for fossil fuels than imports.
Volatility
But more production here could support a larger global market for fossil fuels, undermining global climate goals.
The committee also said there were economic benefits from North Sea oil and gas, such as jobs, though these were less than before, and the Government could raise a windfall tax on energy companies if it chose to do so.
But the committee’s chief executive Chris Stark said: “We want to bust the myth that the answer to the recent increases in the cost of gas and now increasingly the cost of oil is to turn immediately to more UK production.
“I’m afraid that is naive. A message for those who are advocating a new oil and gas bonanza in the UK is it will take too long to ramp up, it will have almost no impact on the price paid by consumers for oil and gas.
“The very best way to shelter ourselves from the kind of price volatility we are now seeing is to pursue net zero.
Photovoltaics
“If we become more energy efficient, if we generate electricity through cheap renewables, and a bit of nuclear, we transition to that more electrified economy with electric cars and heat pumps, it’s a winning strategy for the climate, it’s also a very good strategy for energy security going forward.”
He said the UK should go even faster towards “net zero” – its legal target to cut greenhouse gas emissions to zero overall by 2050 – if it can.
Lord Deben, the committee’s chairman, said: “The truth is people’s gas bills, the price of gas, is very, very marginally affected by what we produce in this country.
“The thing that makes the difference is if we move faster towards cheaper forms of generation, to offshore wind, onshore wind, photovoltaics,” he said, adding energy efficiency was also very important.
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Emily Beament is the PA environment correspondent.
