Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum by the United Kingdom Onshore Operators Group

  The United Kingdom Onshore Operators Group comprises virtually all the companies exploring for oil and gas onshore the United Kingdom. Members produce over 30 million barrels of oil and over 300 million cubic metres of gas per annum.

  As the United Kingdom becomes more dependent on imported gas the availability of gas storage will become more important. The UK is not well-endowed with natural reservoirs suitable for onshore gas storage. However, as onshore oil and gas fields become depleted, they may provide such reservoirs, Hatfield Moors is a recent example. Humbly Grove, near Basingstoke, could be another.

  Our industry takes such care not to affect the environment that many people are unaware of its existence, In a small and overcrowded island, it is right that oil and gas operations should be closely regulated. However, the burden of regulation on the onshore industry is stifling further work. Not only does over-regulation impose a heavy cost in overheads to ensure compliance but it imposes heavy costs due to uncertainty, particularly as to the timing of operations. These costs and uncertainty discourage UK operations in an international industry. Operators prefer other provinces where the regulatory regimes may be as protective but do not impose such uncertainties, costs and delays.

  Onshore production and onshore storage have strategic significance. As they become more important we urge the committee to recommend that the regulatory regime be rationalised to continue to protect the environment while reducing uncertainty, cost and delay.

31 October 2001

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