Backlash over plan to outlaw North Sea drilling – Daily Business

North Sea oil drilling will be banned

A backlash has begun against the UK government’s plan to legislate against new exploration for oil and gas in the North Sea.

An Energy Independence Bill will stop the granting of new licences in line with Labour’s 2024 manifesto commitment to the transition to clean fuels.

The legislation will not affect the decision on whether to allow drilling at Rosebank off Shetland – the UK’s largest known untapped field – which was approved in 2022 before being subject to legal challenges.

The Bill will introduce Transitional Energy Certificates, which would allow existing oil and gas fields to provide additional production from “areas bordering or in close proximity to already licensed fields” or in areas that are already part of an existing field.

The government said the move could produce about 60 million barrels of oil and support hundreds of jobs.

However, David Bucknall, CEO of Ineos Energy, said: “The government’s legislation to ban new drilling in the North Sea would actively decrease energy security in the UK.

“Leaving existing resources in the ground at home while we import the same resources from abroad makes our energy autonomy a victim of global instability. Norway, working the same resource-laden continental shelf, is reopening gas fields that have been shut for decades. 

“The UK North Sea has ready infrastructure: the pipelines, platforms, ports, and skilled workforce needed for energy production are already in place.

“We could use these resources to meet the needs of UK consumers more quickly, cheaply, and securely than bringing energy in from elsewhere, while protecting homes and businesses from the volatility of geopolitical impacts. This legislation chooses campaign promises over the country’s future.”

David Whitehouse, chief executive of industry body Offshore Energies UK, said the government was right to target energy affordability, but said it should also prioritise energy security.

“Today, Britain imports more than 40% of the energy it needs, leaving households and businesses exposed in an increasingly volatile world,” he said.

“We should be making the most of the energy we produce here at home rather than relying on imports.”

Shadow Energy Secretary Andrew Bowie, Tory MP for West Aberdeenshire and Kincardine, called Labour ministers “utterly delusional” and said they were “totally oblivious to the economic and energy threats this country faces”.

Andrew Bowie: Labour is delusional (pic: DB Media Services)

Labour has vowed to sustain “growth and investment across North Sea communities as the energy sector transitions”.

The CBI was more supportive of the bill. Tania Kumar, its director of energy transition, said: “The Energy Independence Bill is a welcome step towards strengthening the UK’s energy security, improving affordability and supporting the transition to a low-carbon economy.

“The Bill addresses some of the key barriers to investment and growth, including high energy costs, delays to grid connections and the need to speed up the delivery of critical energy infrastructure.

“With economic growth remaining at a premium, the focus must now be on delivery and ensuring these reforms help build a reliable and affordable energy system that is fit for the future, while giving investors confidence in the UK’s long-term energy strategy.”

The bill would formally scrap gas standing charges and introduce reforms designed to speed up grid connections, as previously announced.

An energy wealth fund will be created using tax revenue from oil and gas extraction, with an initial £2bn of funding, to invest in renewable and low carbon energy projects.

Prime Minister Andy Burnham said: “Together, these changes will bring bills down for good, give families greater security and put Britain back in control of its energy future.”

Energy Secretary Miatta Fahnbulleh said the bill would help to “build a clean energy future which people feel in their pockets, households and communities, ensuring support reaches those who need it most”.

It comes two weeks after the government approved production from the Jackdaw gas field off the coast of Aberdeen.

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