Osborne: 'Oil and gas vital but so too are renewables and nuclear'
Chancellor George Osborne today highlighted the important role of renewables and nuclear, while commending the oil and gas industry for its continued contribution to the British economy.
Addressing delegates at today's Offshore Europe Conference, the Chancellor paid tribute to an "industry that will continue to play a vital role in the UK economy", but said he recognised that the oil and gas remaining in the UK Continental Shelf will be "increasingly difficult and more expensive to extract".
Despite this, Osborne made it clear that the Government is committed to providing the industry with adequate funding to ensure extraction projects continue.
Oil & Gas UK is estimating a record level of investment amounting to £13.5bn for 2013, which Osborne says will "help to stem the decline in production of recent years".
Oil and gas provide around 70% of the UK's "primary energy needs", with more than half of UK demand for oil and gas met by UK production.
However, Osborne shifted his attention to low-carbon energy. "Oil and gas are vital, but so too are renewables and nuclear," he said.
Stressing the Government's support for renewables, Osborne mentioned the "radical reforms" it is making to the UK's electricity market, as well as the launch of the Green Investment Bank.
"[Reforms to the electricity market] will bring forward up to £110bn of private sector energy investment," he said.
"We've set up a Green Investment Bank to invest in green energy projects and leverage further investment from the private sector," added Osborne.
Little surprise too many, shale gas was also a prominent topic in the Chancellor's speech. Pointing out the recent protests at Caudrilla's shale oil test site near the village of Balcombe in Sussex, Osborne confirmed his position on the controversial energy source.
He said: "Of course, we want exploration of our shale resources to be safe, to avoid environmental damage, and be done in a way where communities get the benefit of what's happening in their backyard.
"That's why we got the industry to commit to generous community benefits," he said.
"But let me also say this. Britain led the way in finding new sources of energy - coal in the 18th and 19th centuries, oil in the 20th century, and renewables at the turn of the 21st century," he added.
Osborne said if the UK "turns its back" on new sources of energy it must prepare for "fewer jobs, less investment and higher costs of living".
Commenting on the Chancellor's speech, Friends of the Earth economics campaigner David Powell said: "Our gas-guzzling Chancellor is giving lavish hand-outs to rich oil and gas firms while communities face the prospect of fracking on their doorstep.
"The only way we're going to avoid catastrophic climate change is by leaving most of the world's oil and gas in the ground - instead of exploiting every last drop.
"George Osborne must put the long-term well-being of Britain first, and end his dangerous fossil fuel crusade by developing the real economic goldmine of renewable power and energy efficiency," added Powell.