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UK Energy Act fails to win favour with industry

The Energy Act 2016 was passed into law yesterday.  The Act – which is seen as an attack on renewable energy – is designed to promote further development offshore and onshore oil and gas in an attempt to arrest the sharp fall in output from the North Sea fields.  Secretary of State for Energy and Climate Change Amber Rudd said:

“By strengthening the Oil and Gas Authority and giving it powers to drive greater collaboration and efficiency in the industry, this Act shows that the broad shoulders of the UK are committed to helping our oil and gas industry attract investment, support jobs and remain competitive for the future.”

However, oil and gas veteran Algy Cluff has hit out at the UK government claiming its energy policy in recent years has delivered “grave threats” to Britain’s energy security, according to Erikka Askeland at Energy Voice:

“The chief executive and founder of Cluff Natural Resources (CNR) said there has been a ‘lack of coherence’ in government policy since 2008 when former Labour leader Ed Milliband was energy minister through a series of coalition energy ministers that Mr Cluff said was ‘depressing’.”

Like many other energy companies struggling with the combination of low oil prices but high extraction costs, together with increasingly tight climate change policies, CNR has been losing money for the last two years.  Faced with this uncertainty and incoherent government policy, the company has dropped plans for converting billion of tonnes of offshore coal into gas; and will instead focus on its existing North Sea oil and gas assets.

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