Fossil Energy – Policy
Given the rising focus on energy security, Wood Mackenzie, an energy intelligence group, has pointed out that the United Kingdom (UK) could get its hands on an additional £10 billion of North Sea oil and natural gas value from existing assets if it puts the right set of fiscal and regulatory policies in place.
With the ongoing energy trilemma at the forefront, as it requires measures to be taken to pursue energy security, affordability, and sustainability with equal vigor, many countries around the globe, including Britain, have taken steps to diversify and shore up their supplies while advancing their energy transition journey.
The United Kingdom’s trade body for the offshore energy industry, Offshore Energies UK (OEUK), recently noted the progress the UK made in reaching its greenhouse gas (GHG) emissions reduction goals while emphasizing the need to secure a continuing supply of homegrown energy and sustaining the supply chain, perceived as vital to bringing wind or hydrogen energy ashore as Britain transitions to a greater reliance on clean renewable energy.
While the Autumn Budget statement is expected on October 30, the government has already announced it would increase the EPL rate by 3% to 38%, taking the UK’s marginal tax rate to 78%, and revealed its intention to remove the EPL’s investment allowance, reduce its capital allowance, and extend its sunset clause from 2029 to March 31, 2030.
OEUK, which pinpointed the decarbonization of oil and gas production as the best way forward to power the nation’s homes and businesses with low-carbon and zero-emission energy, also warned that government revenue from the North Sea could fall by as much as £12 billion by 2029 if all the proposals under discussion at the time were implemented, such as raising total taxes on profits to 78% and removing tax allowances on new investment.
