The Biased Oxford University Report That Claims Renewables Are Cheaper Than Gas

Massaging the numbers by ignoring anything inconvenient

The University of Oxford’s Smith School of Enterprise and the Environment entered Britain’s North Sea policy debate last week with its latest ‘rapid analysis’ entitled ‘Impact of Oil and Gas Exploitation in the North Sea on UK Household Energy Bills‘. Yahoo Finance UK was the first UK media outlet to publish a full article on the study, headlined ‘”Sheer fantasy” to claim draining North Sea oil would cut bills – experts’. A day later, GB News published its piece: ‘North Sea oil would barely cut UK energy bills claim Oxford experts.’

Given that the Smith School is explicitly committed to “the green transition to achieve Net Zero emissions and sustainable development”, the study’s conclusions are no surprise. According to the analysis, even a maximalist ‘drill baby drill’ strategy in the North Sea would save households a paltry £16 to £82 per year — and then only under the heroic assumption that every penny of tax revenue is redistributed directly as bill rebates. Absent such redistribution, consumers would see “no discernible benefit” because oil and gas prices are set on international markets.

In contrast, the study asserts that a fully renewable-powered UK could slash household bills by £105 to £441 annually, depending on the pace of electrification. Anupama Sen, Head of Policy Engagement at the Smith School, was unequivocal: “The idea that draining the North Sea would make the UK more energy secure or significantly save on household bills is sheer fantasy.” The report concludes that “regardless of the remaining lifetime of North Sea oil and gas, a ‘drill baby drill’ approach would actually cost households more money versus continuing on our path to clean energy”. These findings sit comfortably with the school’s self-declared mission.

The lay reader – with a common-sense grasp of high school economics and without the privilege of an advanced Oxbridge degree in PPE – may be forgiven if he asks some elementary questions: won’t an increase in oil and gas production in the North Sea add to the nation’s GDP, improve Great Britain’s balance of payments as a net oil and gas importer, increase government tax revenues and provide oil and gas jobs and ancillary benefits in cities like Aberdeen which serve the offshore oil and gas industry? How do these compare in their impacts to the general standard of living, quite apart from the specific impact on household power bills which the Oxford analysis is focused on? And, curiously, how does the fact that oil and gas prices are set in global or regional markets mean that British citizens will derive “no discernible benefit” by an increase in the country’s energy exports?