Sector News

What does a Conservative win mean for the UK oil & gas industry?

May 11, 2015
News
The results are in, and Conservative leader David Cameron will return to Downing Street as Prime Minister after leading his party to an overall majority in a shock result at this year’s general election.
 
Many believed the days of a single-party government were over, but Cameron and the Tories have surpassed the 326 seats needed to secure victory for the party, with former coalition partners the Liberal Democrats winning just eight seats.
 
Energy policies did not appear a priority during campaigning, but there is no doubt that the outcome of this election will have a massive effect on the energy industry for at least the next five years. The budget announcement earlier this year supported continued investment in the North Sea with tax cuts and policies amounting to £1.3 billion of aid for the sector, and it would appear the Conservatives will further support the oil and gas industry now they are alone in parliament.
 
Energy Secretary loses seat
 
Ed Davey, the UK’s Energy Secretary and a member of the Liberal Democrat party, lost his seat in parliament to Conservative rival James Berry. The Liberal Democrats had campaigned with ‘Keep Britain Green’ energy policies, aiming to reduce carbon emissions by at least 40% by 2030. They also intended to boost investment in renewable energy, having set up the Green Investment Bank which invested public money into renewable projects in a manner similar to a private investor.
 
The Conservatives, however, have promised to remove all new subsidies for wind farm technology, thereby ‘halting the spread’ of onshore wind. Cameron has said he will back ‘good value’ green energy and continue to support the UK Climate Change act, but the UK awaits his final policies surrounding renewable energy.
 
‘All out for shale gas’
 
Cameron’s 2014 commitment to go ‘all out for shale gas’ may have been a controversial one, but now he has secured power this could be huge news for the oil and gas industry in the UK. Estimates suggest up to £6 billion of shale gas annually could be produced in Lancashire for the next three decades.
 
The operator of the recent Horse Hill discovery has insisted there are no plans to frack the area. Many believe they are playing down the necessity and fracking may be inevitable, and some areas of the discovery will ‘certainly’ require fracking to be of any potential commercial interest.
 
The Infrastructure Act, passed earlier this year, has made it easier for fracking operators to get the go ahead but Cuadrilla have faced a delay in decisions over their application to frack in Lancashire twice already, with the final decision now due in June. Cameron yesterday ruled out a ‘dash’ for fracking in the UK, and was quoted as saying that recovering unconventional gas will only go ahead with stringent environmental safeguards. There are concerns that going ahead with fracking could see the UK far exceeding its carbon budgets.
 
Fans and protestors of fracking alike will be keeping a close eye on what happens next following Prime Minister David Cameron’s promises to continue the support for the safe development of shale gas.
 
Source: Oil Voice

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