British PM Liz Truss opens North Sea to drillers

A new round of auctions for the right to drill for oil and gas in the North Sea is just one of the strategies meant to ensure adequate supplies at home, British Prime Minister Liz Truss said Friday.

Truss offered something of an all-of-the-above outline for domestic energy policies in a burst from her official Twitter account Friday. Apart from reconsidering a ban on hydraulic fracturing, or fracking, Truss is now turning her focus offshore.

“To secure our long-term energy supply and reduce reliance on authoritarian regimes, we’re accelerating our domestic energy production, including launching a new North Sea oil and gas licensing round,” she said.

Regulators have already moved forward with an announcement of a new offshore licensing round, putting 898 blocks up for auction. Trade group Offshore Energies U.K. said acreage in the southern territorial waters of the North Sea could be especially rich in natural gas, a commodity that’s in high demand due to the energy strains that resulted from the war in Ukraine.

“The U.K. gets 75% of its total energy from gas and oil so producing our own reduces our vulnerability to global shortages of the kind caused by the Ukraine conflict,” Mike Tholen, the trade group’s acting chief executive, said.

Companies have until Jan. 12 to submit their bid. There were 113 licenses awarded to 65 companies in the last auction in 2020.

Apart from fossil fuels, Truss said she was keen to speed up the development of renewable resources, from wind to nuclear power.

Her announcement follows a report from the National Grid, the entity tasked with keeping power supplied to the United Kingdom, that said customers could experience short-term outages during the winter in the event of severe limits on volumes of natural gas.

Like the offshore trade group, the National Grid said the invasion of Ukraine has upended global energy markets. Should oil- and gas-rich Russia tighten supplies to regional economies even further, it would mean short-term power disruptions for the upcoming winter heating season.

Such an occurrence is unlikely. Base-case estimates point to few problems during the winter months.

Barely a month after becoming prime minister, Truss remains under extreme pressure to prove she is the right person for the job. She’s faced wide-spread criticism early in her tenure for a tax plan the International Monetary Fund said would worsen inequality.

Infighting has erupted within her own cabinet over the plan, while many longtime lawmakers have expressed opposition to her economic policies, which they criticize as being too “growth-focused.”

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