Energy Insight: Energy implications of Brexit


Since this Energy Insight was published in 2017, the Department for Business, Energy and Industrial Strategy (BEIS) has, in February 2019, issued guidance for preparing for Brexit for the UK electricity sector; UK gas markets and the UK oil and gas production sector


The UK is far from self-sufficient in energy because, despite the increase in production of energy from renewables, the decline in the production of indigenous oil and gas has required an increase in imports.  The Office of National Statistics (ONS) in August 2016 published relevant statistics:  UK energy: how much, what type and where from? 

Despite the shortfall, the UK still exports some oil, gas and electricity, but halting those exports, even if possible, would not make up the deficit.

Gas

Supply and demand for gas in the UK

 GWh  2016  2017  2018 
 UK Indigenous production    463,314 464,981 449,825 
 UK Imports   529,435  518,154  517,877 
 of which LNG  117,005  73,409  78,111 
 UK Exports  117,043 125,565 83,686 
 Total Supply  894,543 871,929  879,455 
 Total Demand  895,931 872,791 880.246 

Source: Energy Trends : UK Gas last updated 31 October 2019


Provisional figures from the Department for Business, Energy & Industrial Strategy (BEIS) (Energy Trends , October 2019,table 4.3) show that in 2018 the UK:

  • imported a total of 517,020 GWh of gas from Belgium, The Netherlands and Norway; and
  • exported a total of 82,889 GWh of gas to the same three countries plus the Republic of Ireland, thus
  • registered a net deficit of 434,191 GWh from EU Countries plus Norway.
Imports from Belgium increased from 2 thousand (in 2015) to over 35.5 thousand GWh (in 2018), helping to counteract the sharp drop of imports of LNG from Qatar caused by strong demand from Asia.

In 2018 LNG accounted for 78,111 GWh of the total gas imported into the UK, mainly from Qatar, but the UK also exported 1,836 GWh, all to Pakistan.

According to provisioal IEA figures, in 2018 the UK also imported gas from Algeria (318 MCM); Egypt (186 MCM);  Equatorial Guinea (70 MCM); Peru (59 MCM); Russia (1,402 MCM); Trinidad and Tobago (807 MCM) and the USA (524 MCM)


Where else does gas from Belgium, The Netherlands and Norway go?

The main countries exporting gas to the UK also export gas elsewhere, as shown below:

Gas Exports in Million Cubic Meters(MCM) 2018 (provisional)
Gas Exports  From  From  From
 To   Belgium  Netherlands  Norway
 Belgium  - 9,702  6,501
 Denmark      289
 France 907 5,304 18,896
 Germany  0

 41,451

 5,807
 Italy  29 1,223 3,159
 Korea    172 164
 Lithuania      1,098
 Luxembbourg      497
 Netherlands  0  - 30,492
 Poland    2 335
 Spain  80 1 3,185
 Sweden  81 90 144
 Switzerland  0 301  0
 UK  3,197  2,709 33,236
 Other countries   48,421 1,691,278 4,537,235
 Total Exports to world   52,715 1,752,233 4,641,038


Natural gas information 2019 - with 2018 data. IEA, 2019. Table 17.and Table 12


Countries who import gas from the UK also import from elsewhere - see below:

 Gas imports  Imported by:   
 Imported from:  Belgium  Ireland  Netherlands  
 Angola  82 0  231 
 Denmark  0 0 261
 Germany  381 0 6,193
 Netherlands   9,702 0 -
 Nigeria   0  0  381 
 Norway  6,501 0 30,492
 UK 488 2,041 6,858
 Qatar   2,448 0 0
 Russia  0 0 14,091
 Trinidad and Tobago  0  0  458 
 Other  5 04
 Total imports 19,607 2,04158,969
 % of total imports from the UK   2.4%   100%  11.6%
 % of total imports from elsewhere  97.6%  0%   88.4% 


Oil

According to provisional figures published in Energy Trends Section 3, BEIS, June 2019, in 2018 the United Kingdom:

  • produced a total of 51,246 thousand tonnes of oil and NGLs;
  • imported 45,954 thousand tonnes and
  • exported 42,689 thousand tonnes
The UK was therefore a net importer of +3,265 thousand tonnes of crude oil.

UK imports

IEA provisional figures for 2018 are slightly different.  According to them a total of 44,289 thousand tonnes were imported.  Just under 2% came from EC countries (Netherlands and Spain), and 39% from Norway.  17% came from the USA - up from 9% the year before.  Algeria and Nigeria both provided about 13%.  (IEA Oil Information 2019 with 2018 data, Table 8A)

UK exports

58% of exported UK crude oil in 2018 went to EC countries, Netherlands being the largest recipient (41.5%).  Germany took 9% of UK exports. (Oil Information 2019 - with 2016 data. Table 9 IEA 2019) 

EI members can see a more detailed breakdown of figures on our datasheet Trade: UK crude oil exports (DSS08) 

The EI's Petroleum Review covered the Brexit implications for North Sea oil and gas in its August 2016 edition

Electricity

The UK imports and exports electricity, to and from France, Ireland, and the Netherlands.
Total net imports of electricity into the UK in 2018 were 19.1 TWh, up  29.46 per cent compared to 2017.

The UK has remained a net importer since Q2 2010.  

Trade Costs

A 2017 study commissioned by Oil and Gas UK, the trade association representing the UK offshore oil and gas industry, concluded that reverting to WTO trade rules could almost double the costs of trade between the UK and other EU countries from currently around £600 million per annum to around £1.1 billion per annum.

EU nationals in the energy workforce

  • According to the Office for National Statistics, 92% of employees of the UK energy and water sector are UK nationals, while 4% come from EU countries other than the UK (“International immigration and the labour market, UK: 2016”, ONS, 2017).
  • The afore-mentioned study commissioned by Oil & Gas UK deduced that 90% of those directly employed by the oil and gas industry in the UK are UK nationals, only 5% are non-UK EU nationals. However 50% of those hold managerial roles which are often critical for projects (“Brexit and the UK oil and gas industry”, Oil & Gas UK, 2017).
  • A study carried out by the think tank Social Market Foundation in partnership with Adecco Group UK & Ireland in 2016 assessed the role played by EU workers in the UK economy. It estimated that only 1% of employees of the UK gas, electricity and water sector are from EU countries other than the UK. However it was mentioned that the sample size for this sector was relatively small and the result should be treated with caution (“Working together: European workers in the UK economy”, SMF and Adecco Group, 2016).

Policy

Energy Institute Brexit consultations

Views of energy professionals on Brexit impacts, best levels for energy policy decisions, EI Energy Barometer, June 2016

Energy and Climate Change Committee inquiry – Leaving the EU: implications for UK energy policy, Energy Institute response, October 2016

Debate: Implications of Brexit for the energy sector, Energy Institute event summary, October 2016

How much of UK energy policy is shaped by EU policies?

What will Brexit mean for the environment and Britain's green targets? Emily Gosden, The Telegraph, 10 March 2017.

Brexit: Energy Policy. Scottish Parliament Information Centre, 16 November 2016.

Leaving the EU: implications for UK energy and climate change policy. Energy and Climate Change Committee, 15 October 2016

Nuclear Industry Association comment on EU Withdrawal Bill

Leaving the EU: The EURATOM Treaty  IMechE, February 2017

Brexit implications for UK climate policy

Meeting Carbon Budgets – Implications of Brexit for UK climate policy, Briefing note , Committee on Climate Change, October 2016

Brexit implications for UK energy security

Brexit: energy security. House of Lords’ EU Energy and Environment Sub-Committee. 29 January 2018

Energy Insight details


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