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Grant Shapps, the energy secretary, insisted the government was “maximising” Britain’s remaining North Sea oil and gas reserves, arguing it was in line with Britain’s commitment to net zero carbon emissions by 2050.
Labor leader Keir Starmer has said the UK will not grant any new North Sea licenses if his party wins the next general election, but will not cancel existing contracts.
In an interview with the Financial Times Shapps he described Labour’s policy as “madness” and said licenses should be granted for all viable oil and gas fields as long as it was consistent with net zero ambitions.
“What Labor foolishly and irresponsibly want to do is deliberately promote a policy of self-harm by not taking it. [North Sea] oil and gas, but they buy it from abroad,” he said.
Even if the industry “exhausted” all potential contracts in the North Sea, he said, there would still be a rapid production slowdown because it was a mature basin that was running out of hydrocarbons.
“IPCC [Intergovernmental Panel on Climate Change]who is a global authority on the subject, says that to reach net zero by 2050, the world needs to reduce its dependence on oil and gas by 4 percent per year,” he said.
“Even if we granted the North Sea every license imaginable. . . and [UK’s oil production] it will decline by 7 percent per year, twice the rate of the IPCC [recommendations].”
BP oil platform in the North Sea. Shadow energy secretary Ed Miliband said Shapps’ approach to mining would not cut bills or improve energy security © Andy Buchanan/Reuters
Shapps argued that the alternative to using UK hydrocarbons in the UK’s transition to a greener economy is to import fossil fuels from abroad, which usually involves more carbon emissions.
That would leave Britain at the mercy of “Putin or anyone else who wants to hold us to ransom,” he said, referring to the Russian president, whose invasion of Ukraine sent world oil and gas prices soaring.
The UK has phased out imports of Russian oil and gas and continues to import from suppliers including the Netherlands, Saudi Arabia and the US.
“There is no option but to keep buying these things, I don’t see why it is acceptable to buy oil, gas and LNG.”[liquefied natural gas]. . . of all these other nations while denying ourselves the ability to serve our own people and economy,” he said.
“Worse, do it at higher costs and double the carbon emissions. It just doesn’t make sense.”
Ed Miliband, the shadow energy secretary, said the Tory government had left Britain vulnerable to the recent global energy crisis triggered by the war in Ukraine.
The Labor MP claimed Shapps’ approach to mining would not reduce bills or improve energy security while “driving the carriage and horses” through Britain’s climate commitments.
“Every reputable expert, from the International Energy Agency to the Intergovernmental Panel on Climate Change, has warned the government of the dangers of this policy,” he said.
The Office for Budget Responsibility, the fiscal watchdog, stated in its risks report this month that “continuing our dependence on gas at current levels could, in an adverse scenario, be as fiscally costly as completing the transition to net zero”.
British academic Rachel Kyte, dean emeritus of the Fletcher School at Tufts University, criticized ministers’ “bizarre” statements on fossil fuels and warned that the UK risks missing an opportunity to attract investment and create jobs through the energy transition.
“The government seems unable to understand that future prosperity rests on staying at the forefront of the clean energy transition that is well underway,” she said.
Philip Evans, UK climate campaigner Greenpeace, called Shapps’ plan “scary nonsense” because Labor did not propose an “immediate shutdown” of the industry.
But David Whitehouse, chief executive of Offshore Energies UK, the oil and gas trade group, said 200,000 high-value jobs were at risk from the closure of the North Sea industry.
“The figures are clear: the UK has 283 active oil and gas fields, but 180 will be closed by 2030. If we don’t replace them with new ones, production will decline far faster than we can build low-carbon replacements,” he said.
“There is no simple choice between oil and gas on the one hand and renewables on the other. The reality is that we need both to keep the lights on and our economy growing.”
