A new Department of Energy was formed in January 1974, following the emergency caused late in 1973 by the shortage in oil supplies and the sharp rise in the price of crude oil.
The new department took over from the Department of Trade and Industry (1970-1974) all the former functions of the Ministry of Power wound up in 1969, with the exception of responsibilities for the iron and steel industries. The department also inherited from the Department of Trade and Industry, functions concerning atomic energy.
The new department was resposible for coal production, the allocation of supplies and control of the price of solid fuels, the supervision of the gas and electricity industries, the prosecution of research on the health, safety and training of mine and quarry workers, the testing of certain types of mining apparatus, and the oversight of the petroleum industry.
The new department's immediate tasks were defined as an increase in the exploitation of the oil and gas fields in the North Sea, exploration of other such fields in off-shore waters, the development of electricity generation by nuclear power and the development and expansion of the coal industry.
In 1975, the department lost some of these powers when, under the Petroleum and Submarine Pipe-lines Act of that year, the British National Oil Corporation (BNOC) was brought into being. It began operations in November 1975 and it was intended that, through it, the government should take a 51% share in the North Sea oilfields, amounting to a controlling interest. Responsibility for BNOC was made a function of the secretary of state for energy, who was to appoint the members of its governing body.
In the same year, the department also lost control of the Safety in Mines Research Establishment and the Mining Qualifications Board to the Health and Safety Executive.
The Department of Energy remained responsibile for a number of bodies including the United Kingdom Atomic Energy Authority, the British Gas Corporation (later British Gas plc), the British Coal Corporation (formerly National Coal Board), the Central Electricity Generating Board and Area Electricity Boards. The department's Offshore Technology Unit provided administrative and technical support for the Chief Scientist on offshore oil and gas.
Responsibility for authorising the supply of gas by non-public bodies, previously exercised by the Health and Safety Executive on behalf of the Secretary of State for Energy, passed to the Office of Gas Supply (OFGAS) in 1986.
On 13 April 1992, following the General Election it was announced that the Department of Energy was to be abolished. The majority of the Department's functions were transferred to the Department of Trade and Industry (1983-), with responsibility for energy conservation being transferred to the Department of the Environment.