John Redwood's Diary

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By johnredwood on March 30, 2026

Let me have another go at explaining to this hopeless government why extracting more of our own oil and gas instead of importing is good for jobs, good for tax revenues and good for the environment. They clearly have not been listening for the last three years as I and others have set this out.

1. If we import LNG instead of getting more of our own oil and gas, we sack our North Sea staff and pay the wages of people abroad instead.
2. If we produce our own oil and gas the Treasury receives large tax revenues. If we import, foreign governments pocket most of the tax.
3. If we use gas by pipe in the UK instead of gas by LNG tanker, we save three quarters of the CO2 created in producing and delivering the gas to the users. It takes a lot of energy to liquefy, transport and convert back to gas which you do not need for gas by pipe.
4. There is no world price for gas. US wholesale gas is around 75% cheaper than UK wholesale gas because it is gas down a pipe in the US sold under contract. The UK no longer has enough contract gas to keep the price down. There is a world price for internationally traded LNG and that is usually higher than contract gas to cover all the extra costs.
5. Availability of local gas by pipe helps keep open chemical industry plants that use natural gas as a feedstock. The present government is presiding over the collapse of our gas dependent chemical industry.
6. Some of our oil production will be exported, but this is much better than just importing more oil. If you import too much overall with no export offsets you need to borrow or sell assets to pay the bills and can end up with a balance of payments crisis.

Kemi Badenoch has rightly called on the government to lift the bans on new exploration and development of known oil and gas reserves. The government should immediately press ahead with the Rosebank and Jackdaw fields. The existing pipes and production platforms in the North Sea have spare capacity which can be used for some of the new developments, speeding up their production and cutting the costs of doing so. Claire Couthino, the Shadow Energy Secretary, gave the go ahead for Rosebank in 2023. It took this Labour government to slow it up and then seek to prevent it altogether.

In 2023 Claire Couthino as Energy Secretary argued that continuing to extract the North Sea’s oil and gas reserves “is important for maintaining domestic security of supply and making the U.K. less vulnerable to a repeat of the energy crisis that caused prices to soar after Russia’s illegal invasion of Ukraine.” She was right to approve Rosebank. It would have helped today if Labour had not introduced a ban.