Source: Chatham House –
UK should not invest in new North Sea oil as it is ‘a price taker, not a price maker’ – Dr Fatih Birol, IEA chief
News release
jon.wallace
During an event at Chatham House, Dr Birol, Executive Director of the International Energy Agency, said the future of UK energy was electrification.
Dr Fatih Birol, Executive Director of the International Energy Agency, visited Chatham House on 21 May to discuss the continuing Strait of Hormuz crisis, US energy policy, the global impact of renewable energy and artificial intelligence, and the UK’s own energy security debate.
Asked his position on the UK’s energy policy, Dr Birol said ‘the future of the UK energy system is electrification’, which might be powered by renewables, nuclear energy and natural gas. ‘If the UK wants to be a strong, sovereign industrial country I see electrification as the future,’ he said.
Addressing the debate about renewed drilling in the North Sea, Dr Birol said it would be expensive, adding:
‘I don’t still understand how in the UK this becomes a discussion’. He pointed out that even in the US, the largest energy exporter in the world, consumers are still affected by the international oil price, so new North Sea exploration would not affect global oil prices – or reduce prices for UK consumers.
‘I don’t know how the UK can think you can have an impact upon the international oil prices, you cannot. The UK – whatever the field you produce, develop – the UK is a price taker, not a price maker, and it will stay like this.’
He also warned that opportunists may seek to exploit high global oil prices caused by international factors for domestic political reasons:
‘What I’m afraid [of] is the following: the international energy prices, as a result of this, they are going to increase. And they are increasing. And this will affect the domestic prices in the petrol stations, in heating, and so on.
‘In fact, the governments in, let’s say, Europe or UK, or whatever, they don’t have much to do with this, it’s international tension.
‘However there may be some extreme groups – political groups – who can abuse this as a failure of the existing political system in their countries,’ he said.
Addressing the situation in the Strait of Hormuz, Dr Birol said trust in supply from the region had been damaged – ‘the vase is broken’, he said – and that huge efforts would be needed to restore it.