‘Why we can’t count on North Sea oil and gas – and need a green energy transition’
What a difference a general election makes.
Within days of Labour’s historic victory at the polls, the new Energy Secretary Ed Miliband was standing before the House of Commons to announce the steps that the government will take to make the UK a clean energy superpower.
Labour’s ambitious agenda underscores the seriousness with which it intends to approach the energy crisis – from lifting the ban on new onshore wind projects and approving three new major solar farms, to publishing a more ambitious solar roadmap.
The creation of GB Energy, a new publicly owned energy generator, will drive investment in new renewables and support a just transition for workers in fossil fuel industries. The government is also taking the decisive step of putting an end to new oil and gas licenses in the North Sea. This is a clear statement of intent: once again, the UK is ready to be a world leader in meeting the challenge of climate breakdown.
But there has been some confusion and misunderstanding, particularly regarding our plans for the future of the North Sea. So, let’s clear things up.
New oil and gas production won’t cut energy costs
In 2022, the Russian invasion of Ukraine sent gas and oil prices soaring. British households were hit harder by rising energy costs than any country in western Europe, with the impact being felt in every corner of the country, including in my own constituency of Sheffield Hallam.
Even today, the average energy bill is £400 higher than it was in 2021. Some have called for more domestic oil and gas production to shield the UK from future price hikes, but that’s not a solution. The price of gas is largely set by the international market with North Sea production too low to make any meaningful impact to global prices.
That meant that in 2022, UK customers’ bills continued to rise even as domestic production of gas increased by 17%.
With energy bills set to rise again this winter, the only sure way to avoid future crises is to reduce our reliance on gas and oil. That means insulating homes and installing electric heat pumps, powered by renewable sources like offshore wind which generate power at a fixed rate unlike gas power plants. A typical household that made just two key net zero improvements – replacing its gas boiler with an electric heat pump and improving its energy efficiency (to at least Energy Performance Certificate Band C) would have saved £365 on its energy bills in 2022 and £565 in 2023.
We’re already counting the costs of a lost decade for sensible, pragmatic policy, with energy costs for UK households having been £70 billion higher from the early 2010s to 2023 due to the slow roll-out of net zero improvements.
North Sea gas and oil are running out
The North Sea isn’t the limitless resource some seem to think it is. The North Sea Transition Authority, which is responsible for managing the North Sea oil and gas fields, has estimated that production of gas is likely to decline by 55% by the end of the decade and oil by 40%.
That’s even if we were to issue new licences. But too many politicians still refuse to recognise this reality – with as many as 25% of Conservative MPs in the last Parliament refusing to believe the NSTA’s findings. We need to face the facts and deal with the world as it is.
When it comes to energy independence and the quantum of homegrown energy we generate in the next few years, the simple truth is renewable energy is the main show in town. Just one large offshore windfarm would generate as much electricity as the gas that might have come from new drilling of the North Sea floor.
Unless we’re able to massively reduce our dependence on oil and gas this decade, the UK will become ever more dependent on foreign energy – and more vulnerable to the volatility of international fossil fuel markets.
New licences won’t deliver the long-term security workers deserve
I understand the concerns that a halt to future oil and gas licenses will hit jobs in the sector. But we can’t pretend that continuing with business as usual will deliver the long-term economic security that these communities deserve.
Over the past decade, even as new licences have been issued, the number of jobs supported by the oil and gas industry has more than halved from 440,000 to 215,000. North Sea gas and oil is running out – and workers risk falling off a cliff-edge unless we urgently accelerate the deployment of new renewables.
The choice is between a plan to ease the transition and create new opportunities for these workers, or passively watching on as production runs down while jobs continue to disappear.
But there is hope. Industry experts estimate that 90% of all oil and gas workers have skills that can readily be redeployed to new offshore jobs in renewable energy. With the right training, support, and investment, we can guarantee the futures of oil and gas communities across the UK by ramping up renewables for the long term – exactly what Labour has promised to do.
This won’t be an easy transition. But it’s a necessary one if jobs are going to be preserved. Labour’s promise to at last deliver a skills passport, helping workers to more easily move from oil and gas to the renewables sector is just one example of a step in the right direction.
It’s time to lay the foundations of a fossil free future
Oil and gas workers deserve a just transition that protects their livelihoods. It is crucial that their voices and that of trade unions, are actively included in shaping and planning this transition.
And households across Britain – too many of which found themselves struggling to pay the bills under the last Tory government – need to see robust action to ensure that no one is ever forced to choose between heating their homes and putting food on the table again. But as we approach this important debate, it’s important that we’re guided by facts and evidence.
And the evidence is clear – switching to a focus on renewables will create jobs, enhance energy security and set an example to the rest of the world in addressing the climate crisis.
(TNT: TOMMOROWS NEWS TODAY)
