The Lead Untangles: North Sea drilling
There's cries of 'drill Andy drill' and the new Prime Minister has been hinting there may be a change in policy - we drill into the facts
The Labour government under Prime Minister Andy Burnham has been hinting that it might allow new drilling for oil and gas in the North Sea to help with the cost of living crisis.
This follows pressure from the oil and gas industry, right-wing parties (the Conservatives and Reform UK), some media outlets and trade unions, along with U.S. President Donald Trump.
But would new drilling really help cut energy bills or provide “energy security”? And as the UK suffers extreme heat and wildfires, what would this mean for efforts to tackle climate change?
Background: Licence to drill?
Labour was elected in 2024 on a manifesto pledge that it would not issue any new licences to look for and extract oil and gas in the North Sea. But it also said that it would honour licences issued under the previous Conservative government.
Two of these – Jackdaw gas field near Aberdeen and the Rosebank oil and gas field near the Shetland Islands – were blocked by the Scottish court after a legal challenge by Greenpeace. Consultations on both projects are set to conclude in the coming weeks.
The wars in Ukraine and Iran have spiked global oil and gas prices, hitting people’s household energy bills. This has prompted calls for the UK to pause or ditch its climate policies and approve new licences. The argument goes that in a dangerous world, the UK needs its own supply of oil and gas to provide “energy security” and to cut people’s bills.
Would new drilling help the cost of living 0r ‘energy security’?
The evidence for this argument is slim. As both Labour and the previous Conservative governments have acknowledged, the oil and gas drilled in the North Sea is sold at global market prices. Extracting more of it will not change the international cost of oil and gas, which can suddenly jump when the global supply chain is disrupted, as in the Ukraine or Iran wars.
It has been argued that new drilling would provide tax revenue for the Treasury which could presumably be spent on helping the public with the cost of energy bills. Oddly, the most vocal advocates also call for the windfall tax on oil and gas profits to be scrapped. However, revenue is in long-term decline. The Office for Budget Responsibility (OBR) forecasts that oil and gas revenue will drop from £4 billion this year (2025/26) to £0.1 billion by 2030/31.
On top of this, despite record profits, oil and gas companies often pay net negative tax thanks to generous government tax relief, as Shell did in 2024. Analysis by campaign group Uplift suggests the Rosebank project could actually end up costing the Treasury money.
New drilling would also not necessarily increase domestic supply. Analysis by Global Witness found that 80 percent of North Sea oil and gas in 2022 was exported to other countries.
On the proposed sites, research suggests that Jackdaw would only provide 2 percent of the UK’s demand for gas over its lifetime (around ten years), while Rosebank would provide around 1 percent, based on the amount the UK currently imports.
Meanwhile, the North Sea is what is called a mature basin. Production reportedly dropped 75 percent between 1999 and 2024. There are some estimates that up to 90 percent of North Sea oil and gas has already been extracted. Analysis by the climate website Carbon Brief estimates UK gas production will be down 99 percent in 2050 compared to 2025 – and that new licences would only cut this to 97 precent.
If the UK is still relying on oil and gas for its energy when its North Sea resources are used up, it will be even more dependent on imports.
Is UK drilling ‘cleaner’ than imported gas?
Advocates of new North Sea drilling argue that it is “cleaner” than importing oil and gas.
For example, Conservative leader Kemi Badenoch wrote in a letter to the Telegraph last week: “Banning oil and gas drilling from Aberdeen, which has a low carbon footprint, only to import oil and gas from places that drill in a dirty fashion, makes no sense whatsoever.” This argument appears to be based on the claim (made under the previous Tory government) that North Sea drilling’s carbon footprint is “four times” smaller than imported gas.
However, this is misleading. The figure is from a 2023 North Sea Transition Authority press release, and compares North Sea gas production with imports of Liquified Natural Gas (LNG), which is compressed for sea transport – creating emissions in the process – rather than with gas imported by pipeline.
Most of the UK’s gas imports come via pipelines (mainly from Norway), making up around 70 per cent, compared to 15 percent from LNG (mainly from the U.S. and Qatar).
Fact checks by the BBC and Channel 4 found that total emissions from UK gas production were 17 percent lower, not four times lower (75 percent) than imports. In fact, NSTA data shows that UK gas production releases more than double the CO2 emissions of Norwegian pipeline gas.
Meanwhile, Rosebank alone would create an estimated 250 million tonnes of CO2 emissions over its ten-year lifetime, the equivalent of the UK’s total annual emissions in 2024.
What about jobs?
Some have argued that, putting aside bills or emissions, new North Sea drilling would “create jobs” in a sector where workers are increasingly insecure. In fact, the Jackdaw field would provide only 27 new full-time jobs for people working directly on the site, according to its owner Adura, a joint venture between Shell and Norweignan company Equinor.
Oil and gas jobs are in long-term decline, with around 100,000 job losses between 2010 and 2024 under the Conservatives. Despite claims by industry groups like OEUK, this trend pre-dates the 2022 windfall tax on oil and gas profits. In a move full of symbolism, BP recently announced it was looking to sell its North Sea oil and gas business.
What’s the alternative?
At the same time, the wind and solar industry employed more than 270,000 people in 2024, plus 670,000 in supply chains, according to the New Economics Foundation. In the same year, the net zero sector grew three times as fast as the rest of the UK economy, according to the Confederation of British Industry (CBI).
The best way to cut household bills and provide cheap and reliable energy would be to insulate people’s homes, replace dead gas boilers with heat pumps, and continue to invest in wind and solar energy. Analysis by the Energy and Climate Intelligence Unit (ECIU) suggests renewables cut UK wholesale electricity prices by a third in 2025. The government can tweak its targets for clean power and zero-emissions electric vehicles, as it is reportedly doing, but electrification (including EV charging point infrastructure) is the best way to save people money, and to protect them from war-prone oil and gas markets and runaway climate change. ■
About the author: Adam Barnett is UK News Reporter at DeSmog and a freelance journalist. He writes a politics column for the Big Issue and has reported for The Guardian and Private Eye
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