Helping the North Sea transition to a “renewables powerhouse” should be a “national mission” for the UK, ministers in both Edinburgh and London have been told.
The chairman of the North Sea Transition Taskforce – an independent body set up to examine the future for the sector – insisted it would continue to offer “huge opportunities for the UK”.
Philip Rycroft, a former senior UK Government civil servant, called for a “just transition” away from fossil fuels and towards renewables.
While that is taking place, Mr Rycroft said it “makes absolute sense to take what you can from the North Sea”, with the taskforce chairman stressing the higher carbon footprint for imported gas when compared to that produced from the North Sea.
Mr Rycroft told journalists: “This is an absolute no-brainer. We have the resources, we need those resources and we can extract them at a lower carbon intensity.
“We need to be optimising what we take from the North Sea as we then move through the transition to what will ultimately be a renewable future.”
While the UK Government is opposed to licensing new oil and gas fields, the taskforce chairman said that was a “political decision” and “not an economic one”.
Although Mr Rycroft accepted ministers are “not for shifting” on this, he added: “This is not economic logic, this is more a political position.”
His comments came after industry body Offshore Energies UK (OEUK) said last week that the North Sea could produce about half of the oil and gas the UK will need in the run-up to 2050 – but only if new projects can be developed.
The UK Department for Energy Security and Net Zero (DESNZ) has already launched a consultation as it seeks to develop a plan for a phased offshore energy transition for the region.
The two-month exercise will look at harnessing the North Sea’s existing infrastructure, natural assets and expertise to deploy new technologies, such as hydrogen, carbon capture and storage, and renewables.
However, the taskforce, supported by the British Chambers of Commerce, fears without quick action there is a “real risk” of a faster-than-expected decline in oil and gas production.
If this happens, and wind and other renewable projects take longer to fully develop, it fears a gap could open up where there is “no viable industry left to transition over”.
Demanding action from ministers, Mr Rycroft said: “The UK Government needs to treat the North Sea as a national mission, a subset essentially of the wider growth mission.”
The taskforce called on the UK Government to “create a powerful, ministerially-led committee” that would bring together key departments at Westminster, the Scottish Government, industry leaders, trade unions and others.
This new body could then “take responsibility for North Sea transition as a mission that supports the wider government objectives for growth and net zero”.
The taskforce also demanded the UK Government puts in place a “stable, predictable and viable tax regime for North Sea oil and gas” – with its chairman saying the energy profits levy, known as the windfall tax, should be replaced “as soon as practicable”.
Mr Rycroft claimed ministers should “not wait till 2030” – the date the levy is currently due to end.
He said: “The North Sea is a tremendous asset for the UK. A successfully-managed transition as the oil and gas basin matures to a renewables future is in the UK’s national interest, vital for good-quality jobs, revenues to the public purse, energy security and the achievement of net zero.
“Getting this right should be a top priority for both the UK and Scottish governments.”
He added that the UK Government “needs to act now to restore investor confidence in the future of the North Sea, treat this as a national mission and put in place a long-term and coherent plan for a just transition”.
Shevaun Haviland, director-general of the British Chambers of Commerce and executive director of the taskforce, said: “The North Sea is a national asset which deserves national action.”
While she said there was a “delicate balancing act that must be carried out”, she insisted that “with the right approach it is possible to deliver economic growth, green jobs, energy security and climate leadership”.
Ms Haviland added: “The geopolitical world around us is changing at a frightening rate. If we manage the transition well, it will provide a plentiful and reliable source of renewable energy, and give the UK much greater security and economic stability.
“The cost of getting this wrong is too great to ignore. The Scottish and UK governments must join forces and work to protect this hugely valuable resource for future generations.”
But Friends of the Earth Scotland campaigner Rosie Hampton said: “This report is just more of the same from the oil industry and their lobby groups.
“Greedy oil companies have extracted billions in profits from the North Sea while engaging in a deliberate strategy of climate delay and denial.
“The oil industry has dictated and undermined the terms of the energy transition for too long.
“Politicians should instead be talking to the workers and the communities about what their needs are from the move away from oil and gas. This means paid retraining and financial support for those who need it, alongside investing in wind manufacturing to create good, local jobs that serve the energy needs of our communities – not the profits of industry bosses.”
A DESNZ spokesperson said: “We have already taken rapid steps in delivering a fair and orderly transition in the North Sea – with the biggest ever investment in offshore wind and up to £21.7 billion in funding over the next 25 years for carbon capture and storage and hydrogen projects.
“This comes alongside the launch of Great British Energy, headquartered in Aberdeen, and the creation of a National Wealth Fund, both of which will unlock significant investment in clean power projects across the UK and help create thousands of skilled jobs.”
A Scottish Government spokesperson said: “We are taking the appropriate time to consider this report.
“Decisions on offshore oil and gas licensing, consenting and the associated fiscal regime, are all matters that are currently reserved to the UK Government. We will be reviewing the Taskforce’s report alongside careful consideration of the current consultations from UK Government on its approaches to the future of the North Sea.
“We’re clear in our own support for a just transition for Scotland’s oil and gas sector, which recognises the maturity of the North Sea basin and is in line with our climate change commitments.
“We have consistently called on the UK Government to approach decisions for North Sea oil and gas projects on rigorously evidence-led, case by case, basis – with climate compatibility and energy security key considerations.”
