Consciousness of Sheep
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UK oil production rose last year according to a report from the US Energy Information Administration. But before you get too excited, the sobering fact is that even with the increase of around 100,000 barrels per day; UK output is just a third of its 1999 peak.
More alarmingly, the report shows that the collapse in oil prices since 2014 has led to capital flight, leaving the UK – Europe’s largest producer – at risk of significant falls in production in the near future:
“The current lull in both new field approvals and incremental development approvals could lead to significant production declines in the United Kingdom in 2018 and beyond.”
It is becoming clear that an industry that used to be a cash-cow for the UK state is likely to be unable to operate without a package of subsidies and tax breaks in the future. In the absence of anything else that the UK state might derive its income from, this should ring alarm bells in the corridors of Whitehall.
