Economic Report 2017

E conomic R eport 2 017 - F acts and F igures

E C ONOM IC R E P OR T 2 0 1 7 E C M C R E P R T 2 0 1 7

3. Economic Contribution

In Sum m ar y O il and gas is the dominant Ĩuel Ɖoǁering our economy, our transƉort netǁorŬ and our heating systems, Ɖroǀiding oǀer t h r e e q uar t e r s of t h e t ot al e ne r gy m ix in t h e UK. A r ound 6 0 p e r ce nt of t h is com e s fr om indige nous r e sour ce s. Ov e r t h e ne x t 20 years, reneǁaďles caƉacity ǁill groǁ Ɖrimarily Ĩor electricity generation, ďut not ƋuicŬly enough to disƉlace Ĩossil Ĩuels͘ Oil and gas is still edžƉected to comƉrise tǁoͲthirds oĨ the energy midž in 20ϯϱ͘ It w ill r e m ain p ar t of a div e r se m ix of fue ls t h at is r e q uir e d t o e nsur e an aīordaďle and secure Ĩuture energy suƉƉly ǁhile achieǀing emissions reduction targets͘ The ďeneĮts oĨ meeting domestic oil and gas demand Ĩrom indigenous sources oĨ Ɖroduction are ǁidesƉread͘ The UK ontinental ^helĨ͛s ;UK ^Ϳ resources are critical to security oĨ energy suƉƉly to minimise imƉort deƉendencies͘ tithout domestic Ɖroduction, the UK ǁould h av e h ad t o im p or t £ 17 b illion w or t h of oil and gas last y e ar t o m e e t demand, ǁhich ǁould haǀe increased the UKΖs ďalance oĨ trade deĮcit b y alm ost 5 0 p e r ce nt . The industry also currently suƉƉorts oǀer ϯ00,000 ũoďs in the UK͘ Although this is around ϯϱ Ɖer cent ďeloǁ the ƉeaŬ in 201ϰ, the leǀel of e m p loy m e nt is e x p e ct e d t o st ab ilise ov e r t h e r e st of t h e de cade if actiǀity ďegins to ƉicŬ uƉ͘ esƉite most oĨ the UK͛s reserǀes lying oī the coast oĨ ^cotland, the ǀalue generated Ĩrom the industry is sƉread across the entire country͘ The diǀerse and highly sŬilled suƉƉly chain anchored here also acts as an edžƉort huď, generating almost £ 12 b illion w or t h of r e v e nue last y e ar fr om se r v icing ov e r se as b asins. &urthermore, the sector can helƉ the UK achieǀe its climate change targets͘ Eatural gas is an aīordaďle, reliaďle, relatiǀely loǁerͲcarďon Ĩuel that can Įll reneǁaďle energy intermiƩency gaƉs͘ It has already helƉed the UK achieǀe signiĮcant emissions reductions in Ɖoǁer generation ďy disƉlacing highly carďonͲintensiǀe Ĩuels such as coal͘ A reduction in emissions released during the Ɖroduction oĨ oil and gas is a sign of t h e indust r y ’ s com m it m e nt t o it s ow n sust ainab ilit y and madžimising domestic Ɖroduction ǁill reduce reliance on Ĩuel imƉorts t h at can b e m or e car b on int e nsiv e . E conomic R eport 2 017 - F acts and F igures The average Brent oil price was 30% higher over the first half The UK Government forecasts that of the UK’s energy mix will still c me from oil and gas by 2035 2 / 3 The oil and gas industry supports over The UK Government forecasts that of the UK’s energy mix w ll still come from oil and gas by 2035 300,000 jobs in the UK 2 / 3

The UK Government forecasts that

The average Brent oil price was 30% higher over the first half of this year than the same period last year The oil and gas industry supports over 300,000 jobs in the UK Every £1 million of industry expenditure sustained around 17 jobs across the UK economy last year of the UK’s energy mix will still come from oil and gas by 2035 2 / 3 The average NBP day-ahead gas price was

omic R eport 2 017 nd F igures

40%

higher

sets out aspirations for the industry over the first half of 2017 than the same period last year

of this year than the same period last year

8

The cost of industry

The average NBP

The average

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