Britain’s energy security faces a mounting challenge as the National Energy System Operator (NESO) has issued its starkest warning yet about the country’s gas supply outlook, forecasting that North Sea production will collapse by more than 80% within a decade, leaving the nation critically dependent on foreign suppliers.
The assessment, published in NESO’s inaugural Gas Supply Security Assessment, concludes that domestic gas production will plummet from approximately 27 billion cubic metres (bcm) this year to just 5 bcm by 2035 – a decline equivalent to a reduction of up to 13% annually. This trajectory would leave the UK reliant on imports from Norway, the United States, and Qatar for more than 90% of its gas needs during peak winter demand periods.
Stress Testing Reveals Vulnerabilities
NESO’s analysis examined scenarios for winters 2030/31 and 2035/36, finding that while gas supplies should be sufficient to meet demand under normal weather conditions, the system faces “an emerging risk to UK gas supply security” when tested against more extreme circumstances. The regulator warned that supply could fall short in the event of losing a major pipeline or LNG import terminal – a scenario that becomes increasingly consequential as import dependence grows.
The findings come at a time when the UK already relies heavily on foreign gas. Norway currently supplies around 50% of Britain’s gas, with the remainder coming from domestic North Sea production (approximately 34%), US liquefied natural gas, and Qatari supplies. Government statistics confirm that UK gas production fell 10% in 2024 compared to 2023, reaching its lowest level since 1973.
The assessment has reignited political debate over the government’s energy strategy. NESO’s analysis specifically examined the combined impact of the 78% tax rate on North Sea producers—comprising the 38% Energy Profits Levy alongside existing corporation tax and supplementary charges—and Labour’s ban on new exploration licences.
Shadow Energy Secretary Claire Coutinho described the report as a critical warning: “This report should be a wake-up call. It shows that the UK is in the midst of a gas supply crisis orchestrated by Whitehall, driven by Ed Miliband and Rachel Reeves, leading to an unprecedented, policy-induced decline in North Sea gas production.”
The conclusions appear to challenge Energy Secretary Ed Miliband’s repeated assertions that transitioning away from fossil fuels would reduce Britain’s vulnerability to “petrostates and dictators” controlling global energy markets. Mr Miliband has argued that “dependency on fossil fuels leaves us at the mercy of petrostates” and that clean energy represents the path to genuine energy security.
Some industry observers believe NESO’s projections may understate the severity of the situation. Chris Wheaton, an analyst at Stifel, suggested the official forecasts could be “too optimistic,” warning that the UK might exhaust its LNG import capacity by 2031 as existing terminals approach their maximum operating rates.
Analysts and environmental groups note that the North Sea basin is maturing regardless of policy choices. After half a century of drilling, only around 14% of the UK’s remaining gas resources are considered commercially viable. Official projections indicate that even with new licences, production would continue declining—though potentially at a slower rate than current forecasts suggest.
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A spokesperson for the Department for Energy Security and Net Zero stated: “Gas will remain a vital component of our energy framework as we transition to cleaner, more secure domestic energy sources. This report clearly outlines that decarbonisation is the optimal path to energy security – helping us to reduce gas demand while liberating us from the fluctuations of volatile fossil fuel markets.”
The government has simultaneously launched a consultation on gas system security and announced it would permit new oil and gas production in proximity to existing fields, though it confirmed no new exploration licences would be issued.
NESO emphasised that mitigation options exist, including reducing peak day gas demand through decarbonisation, maximising output from existing infrastructure, and developing new supply sources. The regulator concluded that “a combination of measures will likely be required to mitigate emerging security of supply risks” and committed to working with government, Ofgem, and National Gas Transmission on solutions.
