New row over North Sea oil and gas licences misses the most important point

North Sea oil and gas reserves are dwindling (Picture: STF/AFP via Getty Images) | AFP via Getty Images

In 1999, North Sea oil and gas production peaked at 1.7 billion barrels. However, by 2022, the figure had fallen to 552 million and government forecasts suggest by 2030 it will have halved to just 251 million. So the sector has unquestionably been declining for years and that looks set to continue.

According to the North Sea Transition Authority, the amount of oil and gas in areas not covered by existing licences is estimated to be about two billion barrels – not nothing, but not much more than the amount produced in 1999 alone.

This will not save the North Sea oil industry and, while it would add to the UK’s carbon emissions, by not as much as some might have you believe. Perhaps the biggest problem with issuing new licences would be the message sent to other countries with far greater reserves – that the UK thinks it’s fine to “max out” fossil fuels, in the words of Rishi Sunak.

It is in this context that we should consider the latest row over the issuing of new licences, which Labour pledged to end in its manifesto. An article by the Daily Telegraph claimed that Energy Secretary Ed Miliband had overruled his civil servants in ordering an immediate ban, a report later dismissed by a government spokesperson as a “total fabrication”. Clearly the confusion is regrettable and the government needs to do a better job of communicating its key messages about a sensitive issue.

However, what is far more important is that ministers, the industry itself and unions work together to ensure the engineering expertise developed over decades in the North Sea is not lost and is instead used as an asset to create a renewable energy industry of similar scale.

Without an effective industrial strategy, the North East could see large-scale job losses, emigration as people move elsewhere for work and, in the worst-case scenario, a long-term economic blight across the region.

Climate change, the need to cut carbon emissions, and the decline of the oil industry are all realities that must be faced. Culture war-style spats help no one.