As Putin’s unprovoked invasion of Ukraine leads to global sanctions, the U.K. government will shortly release a new energy supply and security strategy with far reaching consequences. Since the 2014 invasion of Crimea, the UK has spent more than ~$30 bn (~£22bn) importing hydrocarbons from Russia.

“The UK Government is faced with critical choices in its energy strategy. Sanctions on Russia’s energy exports are putting immediate pressure on UK living costs and necessitating scrutiny of longer-term energy security. While the Government’s immediate priority is to provide help for the people of Ukraine and deter Putin’s invasion, its policy response to rising energy prices could have irreversible consequences for our energy and climate future. (…) A demand reduction like this would offer the U.K. the option of eliminating the most expensive imports first or the strategic option of eliminating Russian gas and oil imports by 2024”

Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, University of Oxford

This short, non-peer reviewed ‘rapid analysis’ aims to provide stakeholders with relevant quantitative data in a timely manner, and to contribute reliable statistics to inform public debate. It uses published data and makes high-level assumptions (further detailed below) to explore three scenarios:

• A forward-look at the ‘avoided spend’ on meeting oil and gas demand from 2022 to 2030 if the UK were to meet its Balanced Net Zero pathway in the Climate Change Committee’s (CCC) Sixth Carbon Budget.

• A backward-look at the value of what the UK could have avoided spending on Russian oil and gas if it had not imported oil and gas from Russia post the 2014 Crimea crisis.

• A scenario based on reduced demand for heating – ‘turning down thermostats by 1degree’.

Remaining committed to the balanced net zero pathway would reduce the U.K.’s total demand for oil and gas by around 30% between 2022-30, enabling a reduction in fossil fuel spend by approximately £70bn by 2030.

“Money going out the door to pay for oil and gas can instead be invested on installing cheaper clean energy, saving U.K. households money in the long-term and helping to protect the planet.”

Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, University of Oxford

“Opportunity cost of UK dependence on Russian oil and gas” analysis is available here.

Source: Oxford Smith School

Opportunity cost of UK dependence on Russian oil and gas