The government is right to stand firm on its commitment to ban new North Sea oil and gas licences - and it is vital that Labour resists the growing pressure from the political right to reverse course.
Those calling for a rethink are not offering a serious solution to Britain’s energy challenges. Instead, they are peddling comforting myths that collapse under scrutiny. The evidence is clear. More drilling in the North Sea will not lower bills, deliver energy security, or strengthen our economy. What it will do is lock us into higher emissions and further environmental damage at precisely the moment we must accelerate away from fossil fuels.
At the heart of the argument for new licences lies a fundamental misunderstanding of how the UK energy system works. Advocates of more drilling in the North Sea would have us believe that the UK’s vulnerability to energy price shocks is because we lack access to oil and gas in physical terms, when the real problem is that we are exposed to volatile global fossil fuel prices. We already import roughly 50 to 60% of our gas, and this figure is projected to rise to between 80 and 90% over the next 10 to 15 years as North Sea reserves continue their long-term decline. Even if we were to drain every drop from the North Sea, we would still be reliant on imports. The only long-term solution is to get off the fossil fuel rollercoaster and transition to a clean energy system. That is not ‘climate fanaticism’, it is simply geological reality.
And the fact that more North Sea oil and gas won’t bring down our energy bills is simply fiscal reality. Any oil or gas extracted in UK waters is sold on the international market. There is no mechanism to compel producers to sell it domestically at a reduced price. As a result, increasing domestic production has virtually no impact on the energy bills faced by households. British consumers still pay the going global rate, whether the fuel comes from beneath the North Sea or from overseas imports.
The decline of North Sea production also puts paid to the notion that new licences will generate a meaningful economic windfall. UK oil and gas output has already fallen by roughly three-quarters since 2000. Even during the era of maximum economic recovery, production continued to drop steeply. The North Sea Transition Authority (NSTA) projects that by 2050, oil output will fall by 94% relative to 2025 levels, or to 91% even if new drilling is pursued. For gas, the decline is even starker: 99% without new fields and 97% with them. Remaining North Sea reserves such as Rosebank have sat undeveloped for so long for good reason. Adverse geological and weather conditions mean that Rosebank has historically been considered too much of a profit risk for would-be developers, due to high costs and uncertainty.
This is all on top of the significant length of time to market for new oil and gas fields – upwards of a decade. Considering the full picture as presented by these facts, new licences would make only a marginal difference to production, fail as a short-term fix, and do nothing to change the long-term trajectory.
For those arguing that new drilling could boost public finances, the numbers simply do not add up. The only way to increase production in the short term would be to lower tax rates on oil and gas companies, effectively handing back revenue at a time when voters are already angry about energy company profits during the cost-of-living crisis. The idea that we should subsidise further extraction while households struggle to pay their bills is both economically unsound and politically untenable.
And while those that want to pursue more drilling in the North Sea at all costs would have us see this as a second order issue, it is simply unavoidable that the climate implications would be profound.
Approving new oil and gas developments is fundamentally incompatible with both our national climate goals and our international obligations. The UK has rightly positioned itself as a global leader on climate action. That leadership cannot be maintained if we continue to expand fossil fuel extraction. To do so would be to extend our dependence on precisely the fuels we are committed to phasing out. The science is very clear that if we are to meet our net-zero targets, we must leave a significant portion of known fossil fuel reserves in the ground. The climate impact of the alternative is stark – and would have significant, negative impacts on public health, our infrastructure and our economy. Last summer was the hottest since records began, and the UK saw an estimated 1,504 heat associated deaths. Make no mistake – the impact of more drilling for oil and gas would be felt by ordinary people.
Labour’s commitment to banning new North Sea licences is a clear signal to voters about the kind of future we want to build. It resonates strongly with the environmentally conscious, progressive voters who form an important part of Labour’s coalition. At a time when the Green Party is seeking to compete for those voters, any retreat on such a defining issue would send entirely the wrong message. We have seen what happens when Labour takes these voters for granted – and votes lost to Labour’s left run a high risk of gifting more seats to Reform.
It’s also worth noting that despite recent headlines, the policy has relatively little traction among voters on the right, despite being amplified by figures like Richard Tice. There is no evidence that the government changing course on this would win over more voters on the right, but it would risk alienating those who are already committed to the party’s broader vision. In politics, as in policymaking, clarity and consistency matter. Wavering on a core principle rarely builds trust.
The government has a powerful case to make, and we should continue to make it. Investing in renewable energy, improving energy efficiency, and accelerating the rollout of clean technologies offer a far more credible route to lower bills, greater energy security, and sustainable economic growth. We cannot risk imperilling the investment in the renewable energy our country needs to achieve cheap, clean power by directing focus to the polluting energy sources of the past.
Labour’s policy is grounded in evidence, aligned with our climate commitments, and supported by the logic of the energy system itself. Calls to reverse it are not rooted in fact, but in political opportunism. We should recognise them for what they are and reject them. The future of Britain’s energy system does not lie in the North Sea. It lies in the clean, secure, sustainable technologies of tomorrow.
Alex Sobel is the Labour MP for Leeds Central and Headingley, and a founding member of Mainstream.