--- title: "US gas shipped to UK now cheaper than new North Sea supplies" publisher: "Share Talk" author: "sharetalk" published: "2026-09-05T11:39:38+00:00" modified: "2026-09-05T11:39:38+00:00" date: 2026-09-05 canonical: "https://www.share-talk.com/us-gas-shipped-to-uk-now-cheaper-than-new-north-sea-supplies/" category: "Blogs" categories: ["Blogs", "Energy"] tags: ["BRITAIN", "gas", "liquefied natural gas", "LNG", "North Sea Gas", "oil", "UK", "United States", "windfall tax"] image: "https://i0.wp.com/www.share-talk.com/wp-content/uploads/2026/07/d05267c7-312d-4607-93b2-c72d9474a67d.png?fit=1536%2C1024&quality=80&ssl=1" format: "news" language: "en-GB" --- # US gas shipped to UK now cheaper than new North Sea supplies **Published:** September 5, 2026 **Author:** sharetalk **Categories:** Blogs, Energy **Tags:** BRITAIN, gas, liquefied natural gas, LNG, North Sea Gas, oil, UK, United States, windfall tax **Featured image:** ![](https://i0.wp.com/www.share-talk.com/wp-content/uploads/2026/07/d05267c7-312d-4607-93b2-c72d9474a67d.png?fit=1536%2C1024&quality=80&ssl=1) --- **Producing new North Sea gas now costs around 50% more than importing liquefied natural gas from the United States**, according to energy analysts, raising fresh questions over the impact of Britain’s oil and gas windfall tax. Analysis from Thunder Said Energy suggests the long-term gas price required for new UK Continental Shelf developments to break even has climbed to around **$13.50 per thousand cubic feet (MCF)**, up from about $7. By comparison, producing US gas, converting it into liquefied natural gas and transporting it thousands of miles across the Atlantic to Europe requires a break-even price of only around **$8-$9 per MCF**. That figure typically includes as much as $3.50 per MCF for the underlying US gas. The result is an extraordinary situation in which it can be cheaper to extract gas in America, liquefy it, ship it across the Atlantic and deliver it to Europe than to develop new supplies beneath Britain’s own North Sea. ### Windfall Tax Blamed for Rising Costs Analysts at Thunder Said Energy blamed what they described as the “totally crazy” oil and gas windfall tax regime for damaging the economics of new North Sea developments. The Energy Profits Levy was originally introduced by the Conservative government in 2022 before being increased under Labour. UK oil and gas producers now face an effective **78% headline tax rate on profits**, while the levy has also been extended from 2028 until 2030. Labour has additionally moved to prevent new oil and gas exploration. The combination of taxation and uncertainty over future policy is discouraging companies from committing capital to new North Sea developments, according to industry analysts. Thunder Said Energy estimates that if the fiscal burden were reduced and political uncertainty removed, the break-even cost of new North Sea gas production could potentially be **cut roughly in half**. ### UK Becoming More Dependent on Imported Gas The economics are particularly significant because declining North Sea production leaves Britain increasingly dependent on imported energy. Instead of developing domestic reserves, the UK can find itself purchasing LNG produced in the United States and transported across the Atlantic. Seb Kennedy, chief executive of energy market analysis firm Energy Flux, described the situation as **“a damning indictment of UK tax policy.”** He argued that the current level of taxation makes sense only if the Government’s objective is effectively to discourage production of Britain’s remaining resources. A lower fiscal burden, he said, would be likely to produce a substantially stronger flow of investment into the North Sea. The debate comes as pressure grows for the Government to approve domestic developments including **Jackdaw and Rosebank**, which supporters argue could provide additional UK production and reduce reliance on imported supplies. ### Norway Provides a Stark Comparison Britain’s position also contrasts with neighbouring Norway. Norbert Ruecker, head of economics at Julius Baer, argued that Norway’s more stable and predictable policy environment has helped its gas industry remain internationally competitive, including against LNG imported from the United States. The comparison is significant because Norway also imposes a high headline tax rate on petroleum companies. The difference, according to critics of UK policy, is therefore not simply the headline percentage charged but the overall fiscal structure, investment incentives and predictability companies face when committing billions of pounds to projects that may operate for decades. Oil and gas producers have repeatedly blamed Britain’s changing tax regime for decisions to reduce or postpone investment in the North Sea. ### Would More North Sea Gas Lower Household Bills? Climate campaigners dispute the industry’s argument, pointing out that additional UK production would be sold into internationally connected energy markets rather than reserved exclusively for British consumers. They argue that allowing additional drilling would therefore have a limited direct impact on household gas prices while potentially undermining Britain’s climate commitments. That distinction is important. Increasing North Sea production does **not automatically mean British households receive gas at the cost of producing it**. UK wholesale gas prices remain heavily influenced by European and international markets. The economic argument for greater domestic production is instead centred on issues including **energy security, import dependence, domestic investment, employment, tax receipts and Britain’s exposure to international LNG markets**. ### A Tax Cut Would Need to Be Significant Kennedy suggested there could be some movement in government policy, but warned that a relatively small adjustment would be unlikely to materially change investment decisions. A substantial reduction in the fiscal burden would be needed to alter the economics of new North Sea projects. Politically, however, such a move could prove difficult. Opponents would be likely to portray a large tax reduction as a giveaway to oil and gas companies at a time when households continue to face elevated energy costs. That leaves the Government balancing two competing arguments: encouraging domestic production and energy security on one side, and maintaining tax revenues and its transition away from fossil fuels on the other. ### Windfall Tax Has Raised £13bn The Treasury has defended its approach, arguing that the North Sea will continue to have an important economic role while Britain increases investment in clean energy. The Government says the Energy Profits Levy has raised approximately **£13 billion since its introduction in 2022**. The Office for Budget Responsibility forecasts that oil and gas companies will contribute another **£8.3 billion in tax over the next five years**. But the central criticism remains difficult to ignore: Britain possesses substantial gas resources beneath its own continental shelf, yet the economics have reached the point where importing LNG produced and processed in America and transported across the Atlantic can be cheaper than developing new domestic supplies. --- **Original URL:** https://www.share-talk.com/us-gas-shipped-to-uk-now-cheaper-than-new-north-sea-supplies/ *Created by [WP Markdown Endpoint](https://wpmarkdownendpoint.com/)*