Starmer fails to appease North Sea industry amid fears of investment cliff edge
Keir Starmer failed to win over the North Sea industry with his decision to honour oil and gas permits issued under the Conservative government, despite Labour hoping to prevent a cliff edge for investment.
His decision has been painted in some media outlets as a U-turn or compromise measure, with the leader of the opposition supposedly scrambling for a middle ground in a bitter tug of war between unions concerned about job losses and green groups urging him to speed up the country’s journey to net zero.
Yet, if Starmer was hoping for a fudge to appease all sides, then it has done little to restore confidence in the North Sea with industry bodies warning of a huge collapse in production that jeopardises 200,000 jobs.
This concern is supported by the latest North Sea Transition Authority data, which shows output will halve over the decade in line amid plummeting expenditure.
As it stands, there are 24m homes in the UK reliant on gas boilers while 76 per cent of the UK’s total energy comes from oil and gas – making any attempt to cut supply before reducing demand a serious environmental and security challenge.
Robin Allan, chair of Brindex, the body representing smaller oil and gas firms, warned it was a “massive concern” for the sector to see exploration and licensing under threat.
He argued that without ongoing exploration supporting production platforms, industry rigs will be shut down prematurely with future supply increasingly coming from overseas imports.
“On a positive note, this is great news for Norway. Their state-owned company gets its investment returned on Rosebank and then Labour plans to close down British oil and gas industry whilst continuing to import oil and gas from abroad. Norway 1 : Britain 0,” he said.
Rival group Offshore Energies UK’s chief executive David Whitehouse also warned Starmer’s proposed ban on new exploration licenses is “too much too soon”.
He said: “It would be damaging for the industry, for consumers and for the UK’s net zero ambitions. The figures are clear. The UK has 283 active oil and gas fields but 180 will shut down by 2030. If we don’t replace them with new ones, then production will decline much faster than we can build low carbon replacements. It means the UK will become increasingly reliant on imports.”
A North Sea industry source told CityAM that Starmer’s “baffling position only raises more questions than it answers”.
They said: “Labour is effectively shifting the UK’s continental shelf into a maintain and drain strategy with zero further investment. Despite acknowledging oil and gas will play a crucial role for decades to come – both for energy security and to enable the energy transition – Starmer has pushed the UK ever close to the cliff edge he said he wants to avoid.”