The UK is backing away from oil

LONDON — North Sea oil and gas fields used to be a cash cow for the U.K. But now the government is gearing up for a future without drilling.
Labour swept into power at the general election with pledges to shift away from fossil fuels to greener, cleaner energy.
Prime Minister Keir Starmer and his Energy Secretary Ed Miliband have ruled out giving oil and gas firms new licenses to drill off the Scottish coast. The Treasury is about to hike taxes on those companies, too — and use the funds to build more solar farms and towering wind turbines instead.
And last week Labour walked away from defending a legal challenge against drilling in one North Sea oil field, throwing that project into doubt after it had been greenlit by the previous, Conservative, government.
Miliband has acknowledged that the U.K. will continue to lean on existing oil and gas fields for “decades to come.” There are still the equivalent of four billion barrels of oil under the North Sea, according to the latest data from the regulator. But Labour has used its first weeks in office to signal a big shift away from reliance on depleting reserves towards a future dominated by clean technologies.
Miliband has rushed through approval of four huge solar farms since July. Starmer has promised the U.K. will be at the front of the race for green tech, and pledged billions for the new publicly-owned clean energy company, Great British Energy.
“There is an answer staring us in the face,” Miliband told an audience of offshore wind lobbyists two weeks before taking office. “Clean energy we produce at home is cheaper than fossil fuels, and more secure because dictators can’t control it.”
This approach has rattled fossil fuel bosses — and angered opposition MPs who claim it risks ripping away U.K. jobs and would leave the country more dependent on imports. Plus Labour has to mollify union leaders, who are pressing the party on its plans for supporting hundreds of thousands of North Sea workers. 
Nowhere does this scuffle play out greater than among Scottish MPs, worried about the impact in one of Europe’s largest oil producing countries. 
“It’s an utterly dreadful decision,” said Andrew Bowie, a former energy minister whose Aberdeen constituency is a hotbed for oil and gas workers. 
Opposition to the Labour position could come too from the center-left Scottish National Party, which is in government in the devolved Scottish Parliament.
The SNP sought to make Labour’s positioning on a shift away from oil and gas an issue in July’s election — by promising to stand up for North Sea oil workers. This approach failed to stem the SNP’s losses in July, though the party did cling on to all of its Aberdeenshire seats.
Sharon Graham, general secretary of the Unite union — historically one of Labour’s largest donors — has demanded the party halt its ban on future licenses until it can offer a “viable plan for the replacement of North Sea jobs.”
Officials are also dealing with a landmark Supreme Court ruling from earlier this summer, which found that officials must consider the long-term impact on the climate before signing off oil and gas licenses.
Based on that judgment, ministers decided last week they would no longer fight separate legal challenges against the development of Rosebank — the largest untapped oil field in the North Sea.
That decision does not mean the license for Rosebank has been quashed. But it does signify another victory for climate campaigners who want to see an end to North Sea drilling.
Tessa Khan, executive director of the campaign group Uplift, which brought a judicial review against the licensing of Rosebank, said the government taking heed of the Supreme Court ruling was a “massive step forward for common sense decision-making.” 
Labour’s plan to block future drilling is not a first for oil-producing countries. Denmark, for years a base for massive fossil fuel exploration, pulled out of new North Sea drilling in 2020, citing its own bid for green alternatives. New Zealand ruled out new licenses off its shores in 2019. 
If the courts ultimately rule that consent for Rosebank is unlawful, a decision would fall back to Miliband and the regulator, the North Sea Transition Authority, to make a fresh decision based on new environmental assessments.
The government said it would publish new environmental guidance for oil and gas companies in the wake of the Supreme Court ruling. It is set to consult later this year on implementing the ban on future licenses.
But this does little to appease oil and gas bosses, who argue that drilling is essential for economic growth. “No consultation or policy paper is going to change that reality,” warned Robin Allan, chair of the Association of British Independent Exploration Companies, which lobbies for the oil and gas sector.
“A government that wishes to grow the economy should listen with interest to industry leaders and should not allow itself to be led by ideologues down the old path of economic stagnation,” he said.
Additional reporting by Nick Earl.