The government has issued a statement claiming that the story which we published last week that it had emerged in the Telegraph and elsewhere that Energy Minister Ed Miliband had announced a halt on new North Sea oil and gas licences, was false. Writing to Scottish Business News the government statement says,
“This piece is a complete fabrication – it invents meetings and decisions that have not taken place.
“As previously stated, we will not issue new licences to explore new fields. We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan.
“We are working with the North Sea Transition Authority to ensure a fair and balanced transition in the North Sea.”
However, it is challenging for the public to understand the difference between the alleged leak or ‘fabrication’ in so far as both conclude that no new oil and gas licences will be issued. It remains to be seen whether this will impact the current round of applications for new licences. Perhaps the nuance in the denial statement is that on-going drilling in support of current licences may be permissible, whilst licences for new fields will not be permissible.
This statement aligns with Labour’s pre-election pledge to stop issuing new licences for oil and gas exploration in the North Sea. The party argues that new licences “will not take a penny off bills, cannot make us energy secure, and will only accelerate the worsening climate crisis.”
However, the move has raised concerns about its impact on jobs and the economy in Scotland. The oil and gas sector reportedly added £30bn to the UK economy in 2022, supporting 200,000 UK jobs, including 90,000 in Scotland.
Scottish Conservative MP for West Aberdeenshire and Kincardine, Andrew Bowie’s comments to Aberdeen Business News with regard to the Telegraph’s remain equally applicable to the Government’s update “This reckless move by Ed Miliband confirms that Labour are no friends of Scotland’s vital oil and gas industry.
“The new Energy Secretary is happy to turn off the taps in the North Sea and put tens of thousands of jobs at risk.
“His economic and environmentally illiterate policy of banning further exploration – which is supported by the SNP – is even opposed by his own officials.
“Keir Starmer should step in and reverse this decision immediately, or risk major damage to our energy security and Scotland’s economy.”
Industry representatives have also expressed concern. In the Telegraph report, David Whitehouse, chief executive of Offshore Energies UK, said:
“We remain deeply concerned that some of the new proposals being put forward for our industry will undermine the energy transition we all want to deliver.
“Labour’s leadership has recognised that North Sea oil and gas will be with us for decades to come and they have committed to managing this strategic national asset in a way that does not jeopardise jobs. They now need to deliver on their commitment to support our industry.”
The ban on new licences comes as the UK grapples with balancing its climate commitments and energy security needs. It remains to be seen how this policy will affect the UK’s energy landscape and economy in the coming years.
Whereas the SNP have in recent years abandoned North Sea oil, former First Minister and leader of the Alba Party, Alec Salmond showed his traditional support for oil and gas and the Scottish economy when commenting on the Telegraph article:
“This is the sort of adolescent political posturing which could cost tens of thousands of skilled jobs across the UK but concentrated on the North East of Scotland. Miliband should remember that in Government careless talk costs jobs.
“Miliband should stop playing to the gallery and take the time to consider a rational energy policy. An immediate cessation of drilling would not only kick workers in the teeth it would embroil the Labour Government in legal actions which would last years if not decades. The new Energy Secretary needs to get his Department and its muddled communications under control.“
