If financial institutions withdraw support, then the UK’s energy security will be undermined, and the government will struggle to deliver a homegrown transition to cleaner energies.

That’s what Francesca Bell, a senior investor relations advisor at industry body Offshore Energies UK (OEUK), said in an OEUK statement responding to HSBC’s decision to end new oil and gas field financing.

“The UK government’s British Energy Security Strategy made clear the need to support the production of North Sea oil and gas, alongside the deployment of offshore wind, solar and hydrogen,” Bell said in the statement.

“We support that strategy. At the moment our members produce nearly 40 percent of the nation’s gas. We can only maintain that kind of output by constant investment. In the future we want to move to supplying low carbon energy. But that will need investment too. This is a multi-decade project,” Bell added.

“During those decades, energy security will be also key. The Ukraine conflict and resulting energy shortages show that ongoing exploration in our waters is critical to ensuring reliable supplies of domestically produced energy in as clean away as possible,” Bell continued.

In a new document outlining its energy policy, which was released recently, HSBC noted that it will “no longer provide upstream finance (through lending or capital markets) for the specific purposes of new oil and gas fields and related infrastructure whose primary use is in conjunction with new fields”.

HSBC stated in the document that it recognizes that fossil fuels, especially natural gas, have a role to play in the transition, but added that this role “will continue to diminish”.

“The Net Zero by 2050 report, issued by the International Energy Agency (IEA) in May 2021, highlights that an orderly transition requires continued financing and investment in existing oil and gas fields to maintain the necessary output, with 2020 financing levels maintained through to 2030 and declining thereafter,” the document said.

“Consistent with that, we will continue to provide finance to clients keeping oil and gas flowing to meet current and future (declining) global demand, with engagement on the transition vital to ensure companies decarbonize and diversify their energy supply, production and business models,” the document added.

“Guidance from international energy and scientific bodies indicates that forecasted global oil and gas demand out to 2050 in a net zero scenario is more than met by existing known fields,” the document continued.

Earlier this month, OEUK warned that skills shortages threatened the UK’s energy transition and security.

“As the national recovery from the pandemic takes shape and the energy security challenge intensifies, competition for skilled workers is increasing,” Katy Heidenreich, OEUK’s supply chain and people director, said in an organization statement.

“The shortage is being made worse by competition from major national infrastructure projects,” Heidenreich added in the statement.