Labour pledge to ban new North Sea oil and gas to focus on green energy branded ‘pie in the sky’

More than three quarters of all the UK’s energy is derived from oil and gas

Business leaders in the north-east of Scotland have hit out at Labour proposals to halt new drilling for oil and gas in the North Sea if the party is elected to government.

The criticism comes after it was revealed Sir Keir Starmer was expected to announce the move as one of five key commitments in the party’s new net zero energy policy, with aims to transform the UK into a “clean energy superpower”.

A publicly-owned energy company will also be created under the “green prosperity” plan, which includes intentions to double onshore wind, triple solar power and increase offshore wind more than fourfold.

Money will be borrowed only for investments in green enterprises, according to reports, while up to half a million jobs in the renewables industry are expected to be created, including 50,000 in Scotland.

But the proposals have been blasted as “pie in the sky” and “hugely damaging” by Aberdeen and Grampian Chamber of Commerce, with the potential to cause major job losses.

Meanwhile, UK energy secretary Grant Shapps accused Labour of strengthening Russian president Vladimir Putin’s tactic to use energy as a weapon against the West with its plans.

Ryan Crighton, policy director at Aberdeen and Grampian Chamber of Commerce, said of the plans: “Big ambition on renewable energy is exactly what we need. However, once again we have politicians threatening to undermine the energy transition with a position on oil and gas that is not grounded in the reality of how net zero will be delivered.

Labour leader Sir Keir Starmer is expected to announce the party's net zero energy strategy during a visit to Scotland's oil and gas heartland in Aberdeen next month. Picture: Robert Perry/PA

“This is pie-in-the-sky stuff drawn up with zero engagement with the industry, or the region, which has been powering the UK for 50 years.”

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More than three quarters of all the UK’s energy is derived from oil and gas, with around 24 million homes relying on gas boilers for heat and hot water and 32 million vehicles still running on petrol or diesel.

Despite the massive increase in renewable energy, about 42 per cent of the UK’s electricity comes from gas-fired power stations.

Labour would ban new drilling for oil and gas in the UK if the party was elected to government, according to reports. Picture: PA

But Russia’s invasion of Ukraine and a surge in demand after Covid restrictions were lifted has sparked enormous volatility in international oil and gas markets, sparking the cost-of-living crisis and raising fears over future supplies.

A Labour source told the Sunday Times newspaper: “We are against the granting of new licences for oil and gas in the North Sea. They will do nothing to cut bills, as the Tories have acknowledged.

“They undermine our energy security and would drive a coach and horse through our climate targets.

"But Labour would continue to use existing oil and gas wells over the coming decades and manage them sustainably as we transform the UK into a clean energy superpower.”

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Mr Shapps said: “In the midst of high energy prices for families, Labour’s ideological vendetta against British energy independence not only risks hundreds of thousands of jobs but strengthens Putin’s campaign to use energy as a weapon against the west.

“The Conservatives are taking a pragmatic approach, supporting sectors that have enabled us to end our reliance on Russian oil and gas, while investing in the clean technologies we need for the future.”

The body representing the nation’s offshore industry has described Labour’s proposals “simplistic”, warning that blocking new drilling licenses would undermine energy security, threaten jobs and lead to sky-rocketing bills for imports.

The UK spent £117 billion on energy imports in 2022, more than double the £54bn spent in 2021.

According to Offshore Energies UK (OEUK), the oil and gas sector is vital for the nation's economic well-being, supporting more than 200,000 skilled jobs and generating over £20bn for the economy this year alone.

“Labour’s approach risks sending the wrong signals,” said OEUK chief executive David Whitehouse.

“We need to meet our climate goals, but without undermining UK energy security, the economy and our skilled workforces.”

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Without new investment in domestic production, the organisation predicts the UK will be forced to import 80 per cent of its oil and gas by 2030, compared to around half now.

Mr Whitehouse said Britons would not forgive a shut-down of the domestic oil and gas industry, only to replace it with imports of foreign oil and gas.

“Everyone is clear that the energy system must change, but business and government must do this in partnership,” he said. “As we build that future there is no simple choice between oil and gas on the one hand and renewables on the other.

“The reality is that to keep the lights on and grow our economy we will need both.”

The UK government has set a target to reach net zero – neutral greenhouse gas emissions – by 2050, with Scotland seeking the same goal by 2045.

Westminster is responsible for oil and gas licencing in the UK, having recently given the go-ahead for the new Jackdaw and Cambo field.

The biggest known untapped reserve in the North Sea – Rosebank, off Shetland, which is estimated to contain 500 million barrels – is awaiting a decision.

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It’s thought Sir Keir will officially unveil the Labour energy plan during a visit to the north-east of Scotland next month.

Mr Crighton added: “Sir Keir Starmer has promised to come to Aberdeen – he needs to make good on that promise in the coming weeks, before this hugely damaging policy position further erodes investment in our energy sector.

“If the alternative is importing oil and gas from other countries at a greater carbon cost, then the UK should always favour domestic production.

“This is a position which has been consistently backed by the public in numerous polls.

“The price of getting the energy transition wrong is 17,000 jobs in the north-east of Scotland alone.

“Labour needs to reflect on that number, engage with the people and companies at the heart of the transition and come back with a sensible position.”