As the Strait of Hormuz closes again, there’s increasingly intense pressure on incoming prime minister Andy Burnham to change the UK government’s policy on North Sea oil and gas drilling.
This is often portrayed as an argument between climate and costs. Rather than chasing efforts to cut emissions, some say, the focus should exclusively be cutting energy bills. Unhelpfully, this sentiment completely misrepresents what is possible and what is at stake.
More drilling in the North Sea will have next to no effect on UK business and consumer energy bills. Adding relatively small amounts to the stock of oil and gas in internationally traded markets will not significantly shift prices and, were it to do so, it would quickly push other production out of the market. The idea that the North Sea can deliver cheap UK energy is nonsense.
It should be acknowledged, however, that the direct effects of drilling would be modest. If there is a climate impact, it would be through increased volume of downstream emissions for which the UK is the upstream producer, and by signalling to markets and other countries that its commitment to climate action is weakening.
Both are real concerns. Legally, the government has to pay attention to emissions it is responsible for and consider this impact. Inconsistent action from Britain in its stance towards oil and gas drilling will weaken our diplomatic hand and give others reason to slow down and pause on climate action. In the context of this record-breaking summer heat and its associated death toll, it would be a pause that people should think twice about.
Supporters list other reasons to consider new oil and gas drilling – energy security, growth and jobs among them. Here at the Cambridge Institute for Sustainability Leadership (CISL), we’ve commissioned economic modelling of different UK energy strategies. The results were conclusive: against every metric, doubling down on North Sea drilling would fail as a long-term strategy.
The truth about the North Sea is simple: there just isn’t enough oil and gas there to provide a major answer to energy security, deliver more than a short-term bump in economic growth or to create widespread long-lasting jobs.
In every case decarbonisation and specifically electrification outperforms chasing diminishing oil and gas returns. Advocates of an energy strategy based on North Sea oil and gas need to look at the numbers – which fail again and again.
If we allow chasing North Sea oil and gas to distract ourselves from increasing the electrification of the economy, investing in new power generation and better grid infrastructure, we will condemn ourselves to remaining at the mercy of international energy shocks.
Facing all of this, why might the government still be looking again at the North Sea? Well, there are real, immediate concerns where current energy policy is having an impact. Local communities that have been dependent on the income and livelihoods of North Sea industry are facing a cliff edge future. And, emissions wise, it is true that using domestic fossil fuels is better than using imported ones.
These points are being made strongly to a government under pressure from trade unions concerned about local jobs and oil and gas businesses seeking permission to exploit fields they’ve already invested in. There are also benefits that can come to the Treasury from increasing revenues based on domestic fossil fuel production – assuming it can happen without public money being used to “derisk” the investments made by oil giants.
There is a case to use the North Sea reverses, while technically not breaking the government’s manifesto pledge against new oil and gas licenses. Such a decision to balance political trade offs and look again at Rosebank or Jackdaw (oil and gas projects originally approved before 2025) would, from a climate change perspective represent an unhelpful signal, but not a major set-back.
Advocates for new oil and gas exploration must be wary that doing so could come with a major political cost. It could be seen as another exmple of a government that is struggling to convince people it has the answer to growing climate risks.
While the practical benefits of oil and gas exploration in the North Sea are real (though limited), our research makes clear that it would be no substitute for a proper energy strategy.
The defining tenets of a succesful national energy strategy are clear. The government’s plan must be consistent, built on firm scientific and economic evidence and be based on future-forward, long-term thinking. At this critical juncture, reaching for easy answers or nostalgia for the energy orthodoxy of the past is not an option.
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