U.S. President-elect Donald Trump has voiced strong criticism of the British government’s energy policy, demanding that the UK “open up” the aging North Sea oil and gas basin and eliminate wind farms. His statements were made via a post on his social media platform, Truth Social.
Key Highlights:
North Sea Context:
The North Sea is one of the oldest offshore oil and gas basins, with production steadily declining since the early 2000s.
Simultaneously, it has become a significant region for offshore wind energy.
Trump’s Position:
Trump stated, “The U.K. is making a very big mistake. Open up the North Sea. Get rid of Windmills!”
He has a long-standing opposition to wind farms, notably fighting against plans for one near his golf course in Scotland in 2015.
Industry Developments:
Trump’s post referenced a report about APA Corp’s plans to exit the North Sea by 2029, predicting a 20% year-on-year production decline in 2025.
UK Government Goals:
Prime Minister Keir Starmer’s Labour government, elected last year, aims to build a low-carbon economy and plans to quadruple offshore wind generation capacity to 60 gigawatts by 2030.
In October, the UK government announced an increase in the windfall tax on North Sea oil and gas producers from 35% to 38%, extending the levy for an additional year to fund renewable energy projects.
Industry Concerns:
Oil and gas companies have expressed concerns that the higher tax rate may deter investments, leading some to sell assets or merge operations.
The North Sea Transition Authority, the UK’s offshore oil and gas regulator, declined to comment on Trump’s remarks.
Opposition Response:
Claire Coutinho, shadow energy minister for the opposition Conservative party, criticized the UK’s approach, stating that “no other major economy is shutting down its domestic oil and gas production… It’s totally mad.”
Current Production Trends:
North Sea production has dropped from a peak of 4.4 million barrels of oil equivalent per day at the start of the millennium to approximately 1.3 million boed now.
Offshore Wind Challenges:
Despite significant developments in offshore wind, the sector has faced challenges, including rising costs due to technical issues, supply chain problems, and higher interest rates.
Major developers like Ørsted have adjusted their investment and capacity targets in response to these challenges.