Sir Ian Wood: Government beginning to realise EPL ‘is not working’

In wide-ranging interview ahead of the Energy Exports Conference next week, Sir Ian Wood said the government had been “overly enthusiastic” with the Energy Profits Levy (EPL) applied to the sector.

Sir Ian spoke with Energy Industries Council CEO Stuart Broadley ahead of the organisation’s annual conference in Aberdeen next week.

Asked as to the status of oil and gas in Scotland today the ETZ Ltd chairman said Westminster has been “significantly over enthusiastic” in applying the EPL (also known as the windfall tax) on oil and gas companies.

“I actually don’t understand why they haven’t revised it,” he added. “Because it’s now obvious it’s not working.”

“A number of developments which otherwise might have taken place have been shelved and some of the new significant field developments, they’re not going to go ahead either.”

“Our understanding is the government are beginning to realise that.”

It comes as Offshore Energies UK says more than 90% of UK operators have slashed spending in the wake of the tax.

Sir Ian also pressed for faster pace on the development of carbon capture and storage, including the Acorn project, which is now in the “Track 2” process awaiting news of whether it will secure government support.

Asked how they could these issues could be addressed, he said implementing a “trigger” or ‘floor’ price for the levy and focus heavily on backing CCS.

Without faster action, he said interim national decarbonisation targets on the road to net zero by 2050 may be at risk.

Asked as to the opportunities available in the energy transition – ranging from offshore wind to hydrogen and decarbonising oil and gas – he added: “It is a massive opportunity. I’m afraid we’re not making as much of it as we should – yet.”

In the face of a competitive global market, he warned “the worst thing that could happen is that we have a very exciting start to what we’re trying to so, but most of the work goes overseas.

“That would be tragic – and I really hope that won’t happen.”

The topic will come under further examination as the challenges of building UK supply chain capability and an export market for skills are all explored at the EEC event itself.

The two-day conference in Aberdeen will be held at the P&J Live on the 6th & 7th of June.

For more information and to register for the conference, visit the event website.