Osborne: gas still number one in UK

Chancellor George Osborne today effectively touted gas as the number one energy source for the UK at a London summit where he welcomed billions of investment into the oil and […]

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By Vicky Ellis

Chancellor George Osborne today effectively touted gas as the number one energy source for the UK at a London summit where he welcomed billions of investment into the oil and gas sector.

His speech comes hot on the heels of one from Deputy Prime Minister Nick Clegg, who yesterday denied there was a rift in the Coalition over greening the economy and hailed new renewable energy projects.

Today at the British Business Embassy summit in London, GDF Suez, Centrica and Bayerngas announced they will create up to 4,000 UK jobs at their Cygnus project in the North Sea.

This project will extract shallow water gas from an 18 billion cubic metre field in the Cygnus field, effectively made possible after the Chancellor’s tax changes to the field allowance earlier in the year.

The Chancellor said the oil and gas sector has “long been one of our great industrial success stories, supporting a third of a million jobs, and extracting the equivalent of over 40 billion barrels of oil to date.”

Pointing to tax breaks for the sector in the last Budget, he added: “We are committed to ensuring that these businesses continue to see the UK and the UK Continental Shelf as an attractive location for that investment… This reinforces our commitment to gas as the biggest source of energy in the UK.”

Energy Secretary Ed Davey added: “The go-ahead for the Cygnus field is terrific news, and will contribute substantially to the UK’s gas needs and support thousands of high skilled jobs.”

Also timed to coincide with the summit, British oil giant BP announced it is creating a research centre for efficient fuel use among other things, called the International Centre for Advanced Materials, with universities including the University of Manchester.

Business Secretary Vince Cable said: “Collaboration between business and higher education institutions is boosting the status of the UK as a driver of innovation, and giving our firms a competitive edge.”