Britain supports deepsea gas, oil, extended nuclear

LONDON (Reuters) - Britain will continue to allow deepsea oil activities, as well as push for more renewable energy and an extended lifespan for its existing nuclear power plants, Energy Minister Charles Hendry said on Tuesday.

The United States has imposed a six-month moratorium on new drilling permits relating to wells in waters deeper than 500 feet, following the a massive oil spill from a BP well in deep water in the Gulf of Mexico.

Britain will continue to explore in its own deeper water reserves to the west of Shetland north of mainland Britain -- the last major area around the UK to be developed for oil and gas.

"We think it's in our national interest to get the most out of own indigenous resources. That means getting the best resources we can out of the North Sea, and that means developing west of Shetland," Hendry said at a conference at the Chatham House thinktank in central London.

Britain would not impose a deepsea moratorium at this stage, a spokesperson confirmed. The share of imports in Britain's overall energy mix will increase by around 60 percent over the next 10 years, including oil and gas, Hendry said.

"Be in no doubt safety considerations will be paramount," he added, regarding deepsea exploration.

London plans to double annual inspections of its offshore rigs, the government said on Monday.

Gas fields west of Shetland lie in waters about 600 meters deep. The remainder of Britain's oil and gas wells are in much shallower water, and for that reason the government considered those activities "fit for purpose" in the aftermath of the BP spill, said Hendry.

ENERGY CHALLENGE

Britain's new coalition government expects to extend the lives of existing nuclear power plants, as well as attract new investment in renewable power to tackle "the greatest energy challenge of our lifetimes," Hendry said.

Most of Britain's coal and nuclear power capacity is due to close over the next decade, as plants reach the end of their lives and also under more stringent pollution controls on coal.

"We're due to see the closure of all our nuclear plants apart from Sizewell B by 2023, unless there are life extensions. There may well be life extensions."

"Our goal is to make Britain the most attractive place in Europe and beyond Europe to invest in energy, to provide secure the low-carbon energy we need to keep prices affordable."

One way in which the new government plans to make low-carbon power more attractive is by introducing a carbon tax on electricity where carbon prices in the European Union's emissions trading scheme fall below a certain level.

The government also plans to introduce a limit on carbon emissions from power generation, intended to boost carbon capture technology for coal plants.

The government was consulting on those two measures, Hendry told Reuters. "There's a consultation going on. If we got it wrong that could be a barrier to investment," he said, when asked on the timing for an announcement.

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