British fuel from new North Sea licences would make up less than 1% of a tank of petrol

Coming ahead of the second reading of the Offshore Petroleum Licensing Bill on Monday 8th January, the analysis by the Energy and Climate Intelligence Unit (ECIU) [1] looks at the use of oil produced in UK oil fields in UK-based refineries and at products made in those refineries, such as diesel, petrol and aviation fuel. It examined the impact of declining production from UK oil fields, with or without new licences, and finds that oil from new licences sent to UK refineries would account for less than 1% of the fuels used in the UK in 2030.

Having claimed that the Bill mandating new licencing rounds would ‘bolster’ the UK’s energy security, the Government recently acknowledged that 80% of oil from new fields such as Rosebank will be traded internationally and said that “it is not desirable” that it be allocated to the UK. [2]

Commenting, Dr Simon Cran-McGreehin, Head of Analysis at ECIU said: “New licences are a distraction from policies that would have a real, lasting impact on the UK’s energy independence. Oil from new fields such as Rosebank will be traded internationally – as the government has admitted, this oil is not earmarked for the UK and it won’t make any real difference to UK prices.

“The Government’s recently introduced ZEV mandate to boost EVs will have a much bigger impact by reducing our demand for oil in the first place. But much more could be done to boost the UK’s energy independence by properly backing British renewables and helping people insulate their homes to cut energy waste. The Government is doing much less well on those fronts and with everyone in agreement that the North Sea will inevitably continue to decline, unless efforts are upped, the UK’s energy independence is being put further in jeopardy.”

Professor Gavin Bridge, Fellow of the Durham Energy Institute at Durham University, said: “The reality is very little of the oil pumped from the North Sea is refined and sold on British soil, and even then the price is largely dictated by international markets. The notion that more drilling on the continental shelf boosts our energy security doesn’t stand up to scrutiny. Most of the oil is extracted by private or foreign state-owned companies over which the Government has little control.”

Taken together, the declining proportion of North Sea crude used in UK refineries, mismatches between refinery output and UK demand, and the fact that even under-produced fuels are exported mean that very small proportions of the oil-based fuels that Britons use come from the UK oil fields via UK refineries: just 13% in 2022.

As fractions of the total amount of fuel that Britons used, production from UK oil fields via UK refineries in 2022 accounted for:

• one in every 13 litres of petrol
• one in every 16 litres of road diesel
• one in every 30 litres of aviation fuel

With North Sea oil production in decline, these statistics are likely to become even more stark in future. Using forecasts from the North Sea Transition Authority (NSTA) for oil production in existing fields [3], if UK demand for fuels does not fall and if import/exports shares remain as in 2022, then by 2030 production from UK oil fields via UK refineries would be the source of:

• one in every 24 litres of petrol
• one in every 31 litres of road diesel
• one in every 60 litres of aviation fuel

Even if UK oil production was expanded to the maximum level in projections by the North Sea Transition Authority (NSTA), if demand for fuels does not fall then this would still leave only a small minority of fuels used in the UK coming from UK oil fields via UK refineries:

• one in every 20 litres of petrol
• one in every 26 litres of road diesel
• one in every 50 litres of aviation fuel

So, new licences for drilling in UK waters would increase by less than 1% the amount of each fuel (such as petrol) used in the UK in 2030 that would come from UK oil fields via UK refineries.