North sea oil and gas outputs decrease

adminBusiness Electricity, Business Gas, Utilities Market Regulation, Wholesale Utilities Markets

The Department of Energy and Climate Change has released new figures showing that imported coal is replacing gas and oil from the North sea in the UK fuel mix.

Oil Rig

The newly released data shows that North sea oil and gas production fell by 16% and 25% respectively in the second quarter of 2011, while coal imports rose 36% in the same period.

DECC said “maintenance and other production issues” were the main causes adding to the general downward trend being seen as the supplies run out.

The significant drop in gas output is thought to have been partly caused by the north sea tax – increased taxes on north sea gas in the 2011 budget.

“For the sake of the UK’s economy and its energy security, we should be doing everything we can to encourage sustained investment in our nation’s oil and gas resource to slow the decline and prolong the producing life of fields.” said Malcolm Webb, chief executive of industry group Oil & Gas UK.

These figures could put pressure on the government in regard to shale gas projects. It was recently estimated that up to 200 trillion cubic feet of shale gas lies beneath the North-west of England, but the hydraulic fracturing process – known as ‘fracking’ – is a subject of intense ongoing debate.