David Prosser: Britain cannot afford to turn its back on deepwater drilling

Outlook In the end, of course, it is all about the money. The Energy and Climate Change Committee's announcement today that a moratorium on deep-water drilling off the coast of the UK should not be imposed does not imply there is no risk of the sort of disaster seen in the Gulf of Mexico last summer. Whatever your views about the safety record of oil and gas explorers, that risk can never be entirely discounted. No, this is a decision based on a head-headed economic view: that such is the demand for oil and the cost of switching to less risky alternative sources of energy, deepwater drilling needs to continue.

There will, no doubt, be tighter regulation of those companies operating in the North Sea. But no British government is going to block development of the 100 or so deepwater sites at various stages of exploitation in UK waters. These resources account for around 25 per cent of the country's identified reserves – to give up on them would be to extend our dependence on imported oil from Opec nations.

Opec enjoys this dependence. The International Energy Agency warned yesterday that the oil price, which has been hovering around $90 a barrel for some weeks, is slowly but surely moving back towards $100 and to levels that threaten to undermine the economic recovery of the world's developed economies. Yet Opec has not even begun to talk about raising the production caps it imposed before that recovery got going and demand began to rise.

Even in the US, the victim of last summer's spill, the deepwater moratorium has been lifted. President Obama's administration has, in recent days, hinted it is now close to granting applications for new licenses.

In this context, today's report makes the right call. British safety regulations are among the strongest in the world. There is room for improvement – certainly for better policing of the rules – and we should continue to invest in alternatives to oil. We are not yet at a stage, however, where we can afford to turn our back on deepwater resources.