Photo of Oil and Gas Platform by Dean Brierley
Increasing oil and gas production in the North Sea makes little difference to the UK’s energy import levels, according to Energy Minister Michael Shanks. Speaking to the Scottish Affairs Committee, Shanks said that most domestically produced fossil fuels are traded on global markets rather than reserved for UK use. As a result, any expansion in North Sea extraction does not significantly reduce energy imports or lower energy bills for consumers.
“The truth is we’ve been importing significant amounts for so long that our energy mix is a diverse mix of imported LNG and others,” Shanks told MPs. He added that the assumption that domestic production automatically improves energy security is “not borne out by the facts.”
Although the UK still relies heavily on gas for power and heating, much of it is sourced from international suppliers. Shanks acknowledged that domestically produced gas will continue to play a role in the UK’s energy system, particularly as a backup, but emphasised that it does little to protect households from volatile global gas prices.
Officials from the Department for Energy Security and Net Zero also addressed environmental concerns. Michael Brennan, representing the department, said that while imported liquefied natural gas (LNG) can have up to four times the carbon emissions of North Sea gas, there is no clear emissions benefit to prioritising domestic extraction. The UK’s Climate Change Committee has found that expanding domestic production does not significantly change the nation’s overall emissions profile.
This position is in line with the Labour government’s policy, which avoids issuing new North Sea exploration licences while focusing on managing the basin’s natural decline responsibly. Shanks reaffirmed that the government’s priority is to transition towards renewables and low-carbon industries, including support for workers currently in oil and gas roles.
Industry groups have expressed concern over this approach. Offshore Energies UK has warned that without fresh investment, domestic production could shrink to just 20% of UK demand by 2030, pushing the country’s reliance on imports up to 80%. The group argues this could risk jobs, tax revenue, and the resilience of UK-based supply chains.
At the same time, independent analysis challenges the energy security case for new licences. The Energy and Climate Intelligence Unit (ECIU) has projected that oil from newly licensed fields would meet less than 1% of UK fuel demand by 2030, suggesting minimal national benefit.
The government has also clarified that it will not mandate private energy firms to sell their oil and gas to the UK market, saying it is “not desirable” to interfere with global energy trade flows.
As North Sea reserves decline naturally, the UK faces a crucial choice: double down on fossil fuels with diminishing returns or accelerate the shift to clean energy and long-term energy independence. The government has made its position clear, but debate over the balance between security, climate, and economy remains deeply contentious.