The UK government faces renewed pressure to change its policy on the North Sea and reverse its ban on new exploration licences as Wood Mackenzie analysis reveals the nation is currently set to rely on US LNG for over 60% of gas supply by 2035.
The weaponisation of energy in conflicts in Ukraine and now Iran, make it crucial that import-reliant countries must do more to ensure an uninterrupted, affordable, and reliable supply of energy.
Key findings:
- Even if the UK reaches net zero, UK demand for oil and gas in 2050 will be around 0.5 million boepd. The UK will always remain a net importer of oil and gas.
- While the UK North Sea is being overlooked as too mature to make a difference, any incremental volumes produced will reduce the country’s import dependence and improve energy security.
- Every additional trillion cubic feet of gas produced in the UK North Sea would save 15 MtCO2e of scope 1&2 emissions if it displaced an equivalent volume of US LNG imports.
- By 2035, all UK LNG imports will come from the US. By then, the UK will rely on US LNG for over 60% of its gas supply. Recent history highlights the risks of reliance on a single country.
- The cost of UKCS gas supply on a short-run basis is almost half that of US LNG.
- Governments should keep all options on the table, rather than legislate them away. If, for example, the UK found itself under direct threat from hostile nations, it could be forced to rely on its own resources rather than imports. Exploration would then be of strategic national importance.
- A ban on new exploration licences limits the UK’s potential to maximise domestic production at the expense of more emissions-intensive LNG imports.
Gail Anderson, Research Director, North Sea Upstream at Wood Mackenzie, said: "While a huge upscaling of renewables is absolutely needed, our key message – even more relevant in 2026 – is that the UK needs all types of energy and should encourage more renewables, hydrocarbons, CCUS, and hydrogen from the North Sea. Amid such market volatility, improving energy security by reducing our dependence on LNG imports should be a priority. The UK needs a 'both and' approach – more renewables and hydrocarbons – not 'either or'."