2025 is set to be a pivotal year for the future of our North Sea.
In the coming months, the UK government will consult on future oil and gas licencing, the future oil and gas fiscal regime and guidance on environmental impact assessments in light of the Finch Supreme Court judgment.
The UK government put into action plans to accelerate investment in carbon storage, offshore wind and hydrogen. The Scottish government’s Energy Strategy and Just Transition Plan will be finalised. Important times.
Our North Sea has powered the United Kingdom for decades through the production of homegrown oil and gas and is now providing new energy opportunities. The UK already boasts the largest offshore wind farms in the world, and we can take the global lead in floating offshore wind, carbon storage and hydrogen deployment, alongside oil and gas production.
North Sea experience is a badge of honour respected around the world. Our standards, technology and expertise are a pathway to economic growth.
But global events, and even the recent cold weather across the UK, have highlighted concerns with our energy system.
UK energy production hit a record low in the third quarter of 2024, according to official statistics. As a country we are importing 40% of our energy needs from overseas. This is the wrong path. Energy prices in the UK are over twice the equivalent of the US, and now higher than our European counterparts. There is no credible industrial strategy for the UK without a holistic energy strategy that puts energy security and affordability at its heart.
For too long, the debate on energy, and particularly the North Sea, has been polarised. This has to change.
Decarbonising our electricity system is an important goal, accelerating renewable energy alongside carbon storage and hydrogen. This must be delivered in a way that delivers on the promise of high skilled jobs and an expansion of our supply chain.
And we must manage the reality that, today, almost 75% of our energy comes from oil and gas . Our average home in the UK uses over four times more energy from natural gas than from electricity.
There is no credible industrial strategy for the UK without a holistic energy strategy that puts energy security and affordability at its heart.
The Climate Change Committee’s balanced pathway to net zero forecasts that the UK will use 15 billion barrels of oil and gas between now and 2050. The recent forecast from the North Sea Transition Authority predicts that, on the current trajectory, the UK will produce less than 4 billion barrels – meeting less than a third of the demand.
We still have significant oil and gas reserves in our offshore waters and much of this is in close proximity to existing platforms. We should use these resources responsibly alongside renewable energy. Unlocking an additional 4 billion barrels adds over £200 billion to our economy, supports our jobs and supports our world-class supply chain.
The simple truth is that, if we do not produce it here in the North Sea, we will import it – paying less tax to the treasury, without the wider economic benefits, and with a higher carbon footprint.
In the next six months, the future of our North Sea will be shaped along with the future of thousands of skilled workers, the communities that depend on those jobs, the energy supply chain that we need to deliver on the future opportunities and the wider UK economy.
We must get this right.
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