As calls for more UK-produced energy lock horns with outcries to ban new oil & gas, all roads lead to renewables

After the Labour Party’s plans to put a stop to new oil and gas exploration in the UK waters came to light, they sparked not only outrage over potentially exposing the UK to more costly imports but also the zest to end all future licensing for fossil fuels projects. While most agree that investing more in low-carbon and renewable sources will boost the country’s energy security and propel it towards net-zero, many feel this should be a gradual shift in investment rather than casting new oil and gas developments aside right away.

Even though the calls for the UK to turn its back on fossil fuels and wash its hands of new oil and gas projects have been making the rounds for years, the plot thickened further when news started circulating that Sir Keir Starmer, Leader of the Labour Party of the United Kingdom, was going to announce plans to block all new North Sea oil and gas developments while disclosing his net-zero energy policy. Confirmation of such plans being in the works was provided by Jonathan Ashworth, the shadow work and pensions secretary, who underlined at the end of May 2023 that the UK had to move towards more renewable sources of energy.

According to Ashworth, Labour has no intention of shutting down existing oil and gas wells at this point, as it plans to manage them in a sustainable manner. In line with this, drilling activities on projects that have already received a green light will go ahead, but the Rosebank and Cambo projects are likely to be discarded, as Labour previously expressed its opposition to the development of these projects.

Although Labour’s energy roadmap would turn the UK into a clean energy superpower, bolstering its wind, tidal, and nuclear energy aspirations, some fear that such proposals would throw Britain at the mercy of wind in particular, which would entail the risk of becoming over-reliant on this power source in the renewables’ arsenal of green energy. If this scenario occurs and the winds of change do not blow in the UK’s favour, this raises the question of whether Britain will need to rely more on costly imports to bridge the gap in its energy supply.

Striking the right balance between energy security and the green shift is seen as crucial to avoid undermining the UK’s energy security, as a recent report warned that Britain might need to import 80 per cent of its oil and gas by 2030 without new investment in domestic production. At a time when the UK’s windfall tax hike on oil and gas producers’ profits is pushing multiple players to contemplate downgrading their UK portfolio or even exiting the North Sea, political tensions and uncertainties over the sector’s future are perceived as additional roadblocks to investment in domestic oil and gas.

As a result, Labour’s proposals on oil and gas have raised a red flag, as many, including Offshore Energies UK (OEUK), believe such plans come with the potential to weaken the country’s energy security, threaten jobs, and send import bills surging. In light of this, the UK’s representative body for the offshore energy industry has once again repeated its call for the Labour party to meet and listen to the industry, following Sir Keir Starmer’s speech to the GMB Congress 2023 in Brighton.

During this speech, Sir Starmer pointed out that change was coming and added that it could “unsettle” people. He also pledged jobs and growth for the energy sector and its workforce during the expansion into wind, hydrogen, and carbon capture and storage while committing to working with unions and industry on his party’s plans. This pledge comes on the heels of Gary Smith, GMB General Secretary, highlighting that the energy sector needs “plans not bans” while warning that the UK still imports too much of its energy.

David Whitehouse, OEUK Chief Executive, commented: “We want to meet with him because we now need Labour’s sentiment to match up with the substance of their plans. Today, the UK meets over half of its oil and gas needs with oil and gas imported from across the world. Without new projects and investment, this will increase to 80 per cent in this decade. The 200,000 people working in this industry have heard Labour’s proposals and have questions about how they would work in reality.

“They want to know if Labour will allow the continued decline of domestic oil and gas production and the increase of imported oil and gas to meet the country’s needs. They want to know if when they say no new oil, they mean no new British oil. These are the questions we are very keen to discuss with Labour, and at the heart of our request is how we can work together to sustain the activity and jobs in the offshore energy industry.”

Whitehouse underlines that the UK’s oil and gas industry has embraced change and been at its helm for decades while its current members encompass those that are expanding into renewables. OEUK’s boss also underscores that there is “no simple choice between oil and gas on the one hand and renewables on the other,” since both will be needed to keep the lights on and grow the UK’s economy.

“By investing in homegrown production, we avoid costlier, less secure and higher carbon footprint imports while supporting the infrastructure we need to make cleaner, more affordable energy in the UK, for the UK,” emphasised Whitehouse.

Another plot twist comes with an open letter written by Just Stop Oil, a coalition of groups working together to demand that the government immediately halt all future licensing and consents for the exploration, development, and production of fossil fuels in the UK. In this letter, which Just Stop Oil claims to have written to the next Prime Minister, Starmer is asked to commit to resigning if the policy of no new oil and gas is not enacted within six months of winning the election.

Among other things, the letter says: “Committing to stop the suicidal madness of drilling for more oil and gas is the right thing to do. New oil and gas will hasten the collapse of human civilization and impose indescribable suffering upon billions of people. It is literally a matter of life and death for the young, for whole populations in small island states and for the poor in the global south.

“It is genocidal. So, without doubt, ending new oil and gas is the most important national imperative in Labour’s programme. Therefore, we call on you, Mr Starmer, to make a public statement that you will resign if the policy of no new oil and gas licenses and consents, including the cancellation of the ruinous Rosebank project, is not enacted within six months of winning the next election. We ask that a response is made within seven days of this letter.”

While such a commitment is not likely to be forthcoming, the fervour to block future oil and gas development has been ignited even further, as demonstrated by a letter that climate campaigners sent to Scotland’s First Minister, Humza Yousaf, on 5 June 2023 to call on the Scottish government to “not only match but go further” than Labour’s commitment to phase out future oil and gas licensing. The government is being urged to surpass Labour’s plans and oppose new projects in all undeveloped fields and not just the controversial Cambo and Rosebank projects, as Labour has promised to do.

Jamie Livingstone, Head of Oxfam Scotland, says support for oil and gas expansion will “undermine Scotland’s global climate leadership” and adds: “It’s estimated that one person will die of hunger every 28 seconds across East Africa this month because of a drought that would not have happened without climate change.

“A just transition for those working in the oil and gas industry in the UK is essential, but this transition must also be much faster to avert further devastating global impacts. That starts with blocking all new oil and gas extraction. No ifs, no buts. The Scottish government’s leadership on global climate justice will only remain credible if it strongly opposes the UK government granting any new licences for climate-wrecking fossil fuels.”

The letter, which came ahead of Scottish Parliament debate on fossil fuels slated for 7 June 2023, outlines that the transition away from fossil fuels is an opportunity for the “political leadership that is needed to build a fairer and more equal Scotland.” Signed by 5 coalitions and 34 climate, fuel poverty, and international justice groups from RSPB to Christian Aid to Extinction Rebellion Scotland, the letter points out that multiple institutions are clear about the incompatibility of new oil and gas fields with a safe climate future.

Anne McCall, Director of RSPB Scotland, said: “The shift away from fossil fuels and toward renewables is essential if we are to tackle the intertwined nature and climate crises. Continuing to extract and burn oil and gas makes no sense if we want to stop climate change causing chaos for ourselves and the other living creatures that human activities have already harmed.

“With robust ecological evidence informing where new renewable developments go, we must make the shift to clean energy in a nature positive way. Scotland is one of the most wildlife-depleted countries in the world, and our progress in reducing emissions has stalled, so there is no excuse for delaying the transition.”

Dylan Hamilton, Fridays for Future, stated: “The Scottish government has talked the talk, but it’s time to walk the walk. We have allowed the climate crisis to worsen and now people are already suffering all over the world. We can’t afford to take our time, it is a fact that to prevent catastrophic climate breakdown we must end oil and gas extraction. You can’t make deals with physics, as millions of lives and the future are on the line.”

In addition, the letter claims that workers in the oil and gas industry “already have a plan for a just transition, they just need political support to make it happen,” thus, to ensure secure affordable energy Scottish Ministers need to use their powers to “accelerate well-planned domestic renewable energy production and improve the energy efficiency of our buildings.” This comes amidst concerns that Humza Yousaf’s government is going backwards on oil and gas after statements about future North Sea activity from Cabinet Secretary, Màiri McAllan, and the criticism of the Labour position by Energy Minister, Gillian Martin.

Mary Church, Friends of the Earth Scotland’s head of campaigns, remarked: “Every new barrel of oil worsens the climate crisis and takes us further away from a fair and fast transition to renewable energy. The Scottish government must be willing to stand up to oil companies and commit to ending oil and gas extraction as an essential part of planning for a just transition for workers and communities.

“Oil and gas workers are ready to lead a rapid and fair transition away from fossil fuels, and have a blueprint to create an energy industry that protects workers, communities and the climate. Ministers must set an end date for oil and gas this decade to provide certainty for the sector, enable workforce planning and make it clear that investing in renewables is the only choice for our energy future.”

The International Energy Agency (IEA)’s recent report indicates that about $2.8 trillion is set to be invested globally in energy in 2023 while the global investment in clean energy technologies is on course to rise to $1.7 trillion in 2023, with solar set to eclipse oil production for the first time. The remainder, slightly more than $1 trillion, is going to coal, gas, and oil.

As stepping up renewable deployment is seen as a key piece in the puzzle to bring a green and low-carbon energy future to life, converting the existing fossil fuels infrastructure for use in the offshore wind industry brings the opportunity to give a new lease of life to oil and gas platforms while slashing offshore installation costs for renewable energy operators.

However, creating a workforce that can handle the pivot to emerging energy sectors – such as carbon, capture, utilisation, and storage (CCUS) and hydrogen – is perceived as a potential hurdle that needs to be overcome to achieve the Paris Agreement goals for countries around the globe. Learning from oil and gas, especially North Sea players’ transition from oil and gas to offshore wind, can come in handy to tackle this challenge.

Moreover, many stakeholders, including regulators, governments, and companies involved in offshore energy developments, put emphasis on the growing need for better alignment and standardisation of skills and training across different energy industries to ensure that workers can easily transfer their skills and expertise between different offshore energy sectors.

Meanwhile, the Offshore Energy Digital Strategy Group (OEDSG) recently shared a new report about digitalisation gathering momentum across the oil and gas and renewable energy sectors. Presented at an OEUK-hosted webinar, the 2023 Offshore Energy Digital & Data Maturity Survey report provides information about the way organisations are applying data and digital technologies to help transform the UK energy system to achieve net-zero targets.

Karen O’Hanlon, Director Digital Tech at Opportunity North East, explained: “Digital and data technologies are vital to achieving the transition to net-zero. They provide essential tools for monitoring, optimising, and managing energy systems. They enable more efficient resource utilisation and facilitate the integration of renewable energy sources. We also need people and skills to achieve this.”

Bearing in mind that the workforce and skills play an integral role in the energy transition, the survey deems the lack of access to digital and data skills to be a key risk to the delivery of digital and data strategies. In general, challenges facing the energy industry relate to both the upskilling of the existing workforce and recruiting new personnel into different roles across the sectors, thus, organisations are urged to step up initiatives to equip their staff with the necessary knowledge and training.

Carlo Procaccini, Technology Leadership Board Co-chair, said: “Data are crucial for the optimal use of the UKCS to provide energy security and accelerate the energy transition. The report highlights industry progress with data access and digital technologies to extract value from the data, but highlights the urgent need for greater investment in data management and digital skills development. Regulators and industry bodies have an important role in catalysing this.“

Based on the survey’s findings, the OEDSG recommends that individual organisations, industry and government bodies increase efforts to improve digital maturity – with a focus on smaller organisations, equally across wind, oil, and gas – strengthening collaboration not only between operators in every energy sector but also between operators and the supply chain and different energy sectors to help drive forward the energy transition.

Daniel Brown, OEUK’s Head of Data & Digital, explained: “Data and digital technologies play a key role in driving greater collaboration and efficiency across the UK energy sector. This survey provides invaluable insight of how and where we can work together to shape and accelerate our digital efforts in support of delivering net-zero.”

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