Rosebank oil field is a disaster for UK's fight against climate change and its economy – Chris Skidmore MP
The Rosebank oil field has been given approval, severely weakening the UK’s ability to achieve net zero. It’s the wrong decision. We needed to reduce production of fossil fuels, not greenlight more. The UK is already dangerously dependent on foreign-owned and costly oil and gas that has driven up both prices and inflation to record levels, and this decision only worsens the situation.
Just 20 countries are responsible for nearly 90 per cent of all new oil and gas production, the UK among them, when we know we already have enough supply to push the world past safe climate limits. This is a decision that goes against common sense.
The debate over the future of the North Sea needs to be depoliticised. As my amendments to the energy Bill suggested, an independent body could set an end date for new licences. The economic and social risks of transitioning late and badly mean we are delaying the inevitable need to transition, costing more in the long run.
Last week I attended New York Climate Week to launch a cross-party declaration in support of climate action because stronger agreement across all political parties is needed to accept and endorse that the energy transition is here to stay. This is why the UK All-Party Parliamentary Group for Climate exists, where cross-party work is recognised as the only way to grapple with the problem of our time.
It remains my strong view that approving Rosebank is a climate and financial disaster. A future economy no longer reliant on fossil fuels but founded instead on energy efficiency, rooftop solar, onshore wind and other forms of clean energy supply is the direction we should be headed in.
On a fundamental point of logic, there is no such thing as a new net-zero oilfield. Demand for new oil and gas is slowing right down. The International Energy Agency has forecast in research due next month that it will peak before 2030, sooner than thought, because the world is at the beginning of the end of the fossil fuel era. Any new oil and gas will be uncompetitive and uneconomical.
Clearly, investment in oil is bad economics. Meanwhile, the cost of renewables plummets, recognised by global markets and investors. The energy transition is an economic reality from which we can benefit or it can stall, which will cause financial self-harm. Investors will go elsewhere, companies will go elsewhere, jobs won’t be created here, but elsewhere. New research from the TUC starkly shows that between 660,000 and 834,000 jobs could be offshored from Britain if the UK doesn’t deliver comparable clean industrial policies to our peers. Oil fields will become stranded assets far sooner than we think.
The North Sea is an ageing basin and the UK’s transition away from oil and gas production is happening, like it or not. Today, the industry puts the number of jobs supported by the sector at around 213,000, of which 30,000 are directly employed in the industry, 100,000 indirectly, and the rest are jobs in the wider economy that are supported by the sector, for example by oil and gas workers’ spending. In 2015, the total figure stood at 375,000. That’s 162,000 fewer jobs in just eight years.
Now that it is clear extractive industries are waning, entire populations could be stranded and damaged if a transition is not done well and equitably. At the same time, there are plentiful rewards for doing it well. Key is talking, and listening, to the people at the core of this positive change from old to new technologies. Work is happening to this end, for example, Opito, the global safety and skills organisation for the energy industry, has been awarded funding for an energy skills passport to support oil and gas workers in this needed transition. As part of achieving net zero, opportunities exist for the wider UK economy, and can level up regions to create and foster a joint sense of purpose and pride of place.
The UK is not otherwise served by allowing new North Sea developments. Most of what is left in the basin is oil, most of which we export. Rosebank’s reserves are 90 per cent oil, not gas, which the operator, Equinor, has said “will be sold on the open market, and the most likely destination for that oil is the continent of Europe”. Exploiting Rosebank’s reserves will not have an impact on UK fuel prices, nor will it make us more energy independent.
Further, the UK Climate Change Committee has suggested that ending oil and gas exploration would strengthen our diplomatic position and in so doing make it known to investors that our country remains committed to reaching our international climate targets. There are economic, social, diplomatic and environmental benefits for the taking if we get this right and continue to look pragmatically at the facts.
The past is the past; it cannot dictate the future which is necessarily net zero. We can help or hinder this inevitability, but we cannot, nor should we seek to, stop it. We still have time to shape an economic reality in which the North Sea can become a region for new technologies that do not heat the planet, create jobs with a future, and ensure our country, once the industrial leader of the world, continues to lead the needed new industries for a new generation.
Today, though, the government has slowed progress when we should be accelerating efforts to deal with climate chaos. This is a disastrous decision, but the government cannot halt collective and increasing progress towards achieving net zero.
Chris Skidmore is Conservative MP for Kingswood and the former energy minister who signed net zero into law. He led the Independent Review of Net Zero.
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