Yahoo Finance Labour’s North Sea oil and gas ban will lead to 60pc drop in production, industry warns
Labour’s proposal to ban new oil and gas licences will lead to 45,000 job losses and an 60pc drop in domestic production, industry bosses have warned.
Offshore Energies UK, which represents major oil companies, said blocking all new development in the North Sea was “premature” and would make tens of thousands of industry workers jobless years before they have a chance to switch to roles in green energy.
Sir Keir Starmer is reportedly set to announce a ban on new oil and gas projects this month as part of his plans to make Britain a “clean energy superpower” if Labour wins the next general election.
David Whitehouse, chief executive of Offshore Energies UK, said: “If this policy is enacted, we will become increasingly reliant on imported energy.
“That would have a number of impacts. It would undermine the UK energy security, it would undermine those 200,000 jobs that we see across the country, it would make the country poorer.
“And I think, very importantly, it’s worth pointing out that it would also take away the investment that we need for the journey to net zero, because it would undermine those supply chain companies that actually need the oil and gas work in order for them to be able to invest in the longer-term journey to net zero and the technologies we will need.
“There will be opportunities in the future with these new technologies. But our argument is that those jobs do not exist today – so if you undermine the sector today, you lose those jobs.”
The group estimates that 45,000 jobs will be lost by the end of this decade if new investment in oil and gas is banned in the UK Continental Shelf.
At the same time, it points to official forecasts by the Government and the North Sea Transition Authority that suggest that a block on investment would mean the UK’s dependence on oil and gas imports would rise from 50pc today to 80pc by 2033.
If new investment is allowed, this dependence would only rise to 60pc.
It means that a ban on new investment would equate to a 60pc drop in production compared to current levels, Offshore Energies UK said. That compares to a 20pc drop under a “business as usual” scenario as yields from the North Sea naturally decline.
Sir Keir will announce a ban on new oil and gas licences later this month, the Sunday Times reported.
However, the proposal has already been attacked by Labour’s biggest union donor, Unite, which warned that the party risked triggering a jobs bloodbath comparable to that caused by the rapid closure of Britain’s coal mines in the 1980s.
Sharon Graham, the union’s general secretary said: “When Keir Starmer decided to let the world know that he would halt new oil and gas production in the North Sea he left out everything that was important – the detail.
“Labour must now be very clear that they will not let workers pay the price for the transition to renewable energy. When it comes to jobs we can’t have jam tomorrow.”
A Labour source insisted that granting new oil and gas licences will do nothing to cut bills and “drive a coach and horse through our climate targets”.
The source said the party advocates managing existing oil and gas wells “in the most efficient way possible” to continue production, while investing in new renewable capacity.
Conservative cabinet minister Grant Shapps, the Energy Security Secretary, has branded Labour’s proposal “crazy”.
He said that making Britain more reliant on energy imports would open the door “to tyrants like Putin to use energy as a weapon to blackmail our country”.
