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The United Kingdom Government must replace the wind and gas tax on oil and gas “as soon as possible,” said a business -led working group, announcing the window of opportunities to secure the future of the North Sea is “closing” quickly.
The North Sea Transition Task Force, supported by the British Chambers of Commerce, said ministers have chosen to “wait long” with their decision to replace the “flawed” energy profits in 2030.
The current effective tax rate of 78 percent of oil and gas profits was the “crash investment” and risked lower treasury income, according to a report released on Monday.
The industry -backed Task Force required a more proportional regime that would adapt in predictable ways for hydrocarbon prices, thus supporting long -term investments in domestic gas to replace more intensity of natural gas carbon.
The United Kingdom Government has opened a consultation on the fiscal regime after 2030 on oil and gas and its manifest commitment not to issue new exploratory drilling licenses.
The Taskforce’s survey on trade unions and supply chains revealed “widespread concerns” about the future of the North Sea, calling on ministers to “act now to restore investor trust” amidst tens of thousands of fossil fuel -related work.
By 2030, the oil and gas sector will return to the payment of only permanent taxes, currently set approximately 40 percent, but would automatically contribute more if wholesale prices were to rise to unusual levels.
Task Force said if the consensus would reach the thresholds in which the highest taxes would begin, there was no “reasonable reason” to delay by 2030.
“There is no time to sit down,” said Philip Rycroft, head of the working group. “Speed is essential here – good businesses are already voting with their feet.”
The report mentioned Apache’s decision to leave the UK offshore operations, Shell’s union and Equinor operations in the North Sea and job cuts in BP.
Anas Sarwar, the Scottish labor leader, has supported oil and household gas as a promoter of energy growth and safety. He said existing fields in the North Sea could provide “hundreds of billions of value”.
“Openly, if the choice is more expensive imports from despotic regimes such as Russia or New Oil and Gazi (from the North Sea), then the answer should be oil and gas,” he said.
Task Force also recommended a committee led by the Minister to manage the transition from oil and gas to renewable commercial renewable energy.
The Committee, including representatives from the Treasury, the Scottish government and unions, called on the North Sea Transition Authority, which regulates offshore, drafting a strategic plan by the end of this year, Rycroft said.
Rycroft also called on the government to ensure the industry that drilling in well -liked areas would be welcomed.
The Energy Department said it had already taken “fast steps” to provide a fair transition to the North Sea, including investments in offshore, hydrogen projects and carbon capture and storage.
UPLIFE, who campaigns against fossil fuels, said more drilling and tax cuts for oil and gas companies would not provide a fair transition to workers.
“Allowing the new drilling would seriously undermine investors’ confidence in the government’s commitment to leave oil and gas,” said Robert Palmer, Deputy Director of UPLIFE.
“Ministers should see this report like the oil and gas industry simply doing what it has always done: the lobby for lower taxes.”
