Grant Shapps has said that the UK government will “max-out” its remaining North Sea oil reserves. He argues this is in line with Britain’s commitment to achieve net zero carbon emission by 2050.
Labour leader Keir starmer said that the UK would not grant any new North Sea licenses if his political party won the next general elections, but it wouldn’t revoke the existing contracts.
Shapps, in an interview he described Labour’s policy as “madness” and said that all oil and gas fields should be licensed if they are viable and if this is consistent with net zero goals.
He said: “Labour foolishly and irresponsibly wants to deliberately pursue a self-harming policy by not buying that oil and gas [from the North Sea] but instead purchasing it from overseas.”
He said that even if all North Sea contracts were “maxed-out”, production would still slow down rapidly because the basin was mature and running out of hydrocarbons.
He said that the IPCC (Intergovernmental Panel on Climate Change), the global authority on the subject, has stated that the world must reduce its dependence on oil and natural gas by 4% per year in order to reach net zero by the year 2050.
“Even though we grant every possible licence for the North Sea. . . “[UK oil production] will decline by 7 percent a year — twice as fast as the IPCC’s [recommendations]. Shapps argued that the alternative to using British hydrocarbons as the UK transitioned to a greener economy was to import fossil fuels from abroad, which typically involved more carbon emissions.
He said that this would leave Britain vulnerable to “Putin, or anyone else” who wanted to take Britain to ransom. This was a reference to the Russian President whose invasion in Ukraine sparked a global rise in oil and gas.
The UK has stopped importing Russian oil and gas, but continues to import from other suppliers, including Saudi Arabia, the Netherlands and the US.
“I don’t know why buying LNG and oil and gas is acceptable. . . He said: “We cannot deny our people and economy the opportunity to serve them while we are unable to do so for ourselves.”
“And worse still, do it with twice as much carbon emission and at higher costs.” It doesn’t even make sense.
Ed Miliband said that the Tory government left Britain vulnerable to recent global energy crises triggered by the Ukraine conflict.
Labour MP Shapps argued that Shapps’ pro-extraction strategy would neither reduce bills nor increase energy security. It was “driving coach and horses” by Britain’s climate obligations.
He said that “every respected expert from the International Energy Agency, to the Climate Change Committee, has warned the Government of the dangers associated with this policy.”
In its risk report for this month, the Office for Budget Responsibility (the fiscal watchdog) said that, “continuing to rely on gas at current levels could be, in a worst-case scenario, as costly fiscally as completing a transition to net zero.”
Rachel Kyte is a British academic and dean emerita at the Fletcher School of Tufts University. She criticised ministers’ “bizarre statements” on fossil fuels. She warned that the UK could miss an opportunity to create jobs and attract investment through the energy transformation.
She said, “The government appears unable to understand that the future prosperity of our country lies in staying on the cutting edge of the clean-energy transition which is already well underway.”
Greenpeace UK’s climate campaigner Philip Evans called Shapps plan “scaremongering” nonsense, given that Labour did not propose an “immediate shut down” of the industry.
David Whitehouse is the chief executive officer of Offshore Energies UK. This trade group for oil and gas, has said that the North Sea industry’s closure would put 200,000 jobs at high risk.
The figures are clear. There are 283 oil and gas fields in the UK, but 180 of them will be shut down by 2030. He said that if we don’t build new ones to replace the old ones, production will fall much faster than what we can do in terms of low-carbon alternatives.
There is no easy choice between renewables and oil and gas. To keep the lights on while growing our economy, both are needed.