Conservatives: Response to Ed Miliband's North Sea Oil decision

Claire Coutinho, Shadow Secretary of State for Energy Security and Net Zero, said:

“Ed Miliband has overridden the advice of business leaders and the unions to commit an enormous act of economic self-harm.

“This ideological move puts both our energy security and 200,000 jobs at risk. We will still need oil and gas for decades. Labour have just made us more reliant on importing it from abroad with as much as four times the carbon emissions.

“Who will benefit? Putin, China, and exporters in Qatar and the US.”

ENDS

Notes to Editors

Labour's oil and gas ban is a risk to our energy security:

• Industry experts warn Labour's energy policy presents a ‘clear and present danger for energy security'. An industry source told Energy Voice: ‘Never mind the future developments, you're impacting investment now, today, which people will feel in the next couple of years. That rhetoric, those signals they're sending out are going to have a significant negative impact on investment right now, a clear and present danger for energy security right now, as a result of what they were saying' (Energy Voice, 28 May 2023, link).

• A ban on new oil and gas in New Zealand was described as a ‘python around their necks' and was ultimately reversed just six years after its implementation. ‘Six years ago, the Jacinda Ardern government enacted a similar policy in New Zealand. Today, gas-dependent industrial sectors find themselves with something of a python around their necks. Politicians here in this nation of 5.5 million have even begun to openly fret about the country's ability to keep the lights on' (The Spectator, 17 June 2024, link).

• A leading climate litigation barrister in New Zealand described New Zealand's ban on oil and gas as ‘economic vandalism'. ‘Sean Rush, a leading New Zealand barrister specialising in petroleum licensing law and climate litigation, called the oil and gas ban “economic vandalism at its worst in exchange for virtue signalling at its finest”' (The Daily Telegraph, 5 June 2024, link).

Labour's oil and gas ban is bad for the economy:

• Gary Smith, head of the GMB, said Starmer's rush to abandon oil and gas would be a ‘disaster' and lead to ‘economic destruction'.  ‘Voters will not accept “economic destruction” to achieve net zero, one of Britain's biggest unions has warned Sir Keir Starmer. Gary Smith, the general secretary of the GMB union, said a rush to abandon oil and gas would be “a disaster” and urged the Labour leader to rethink his green objectives' (The Daily Telegraph, 20 August 2023, link).

• Stifel's report into oil and gas exploration said that because of Labour's policy of abolishing the investment allowance and increasing the windfall tax ‘the UK North Sea could lose 100,000 of the current c.200,000 jobs that directly or indirectly are employed by the industry'. ‘Loss of investment means loss of jobs and skills for the energy transition. Given the strong correlation between spending and jobs, the UK North Sea could lose 100,000 of the current c.200,000 jobs that directly or indirectly are employed by the industry, and possibly as quickly as by the next general election in 2029' (Stifel, Europe – Oil & Gas Exploration and Production Sector Report, 15 May 2024, link).

• Without new oil and gas licenses, the contribution of the offshore oil and gas industry to the British economy is due to fall by 63 per cent to £11 billion by 2030. This fall would reduce economic output by £19 billion annually, or £380 billion between 2030 and 2050 (Drill Or Drop?, 19 June 2023, link; OEUK, Economic Report 2023, accessed 30 April 2024, link).

• A ban on new oil and gas would reduce household income by £650 every year (Drill Or Drop?, 19 June 2023, link; OEUK, Economic Report 2023, accessed 30 April 2024, link; ONS, Families and households in the UK 2022, 18 May 2023, link). 

Labour's oil and gas ban will reduce tax revenue:

• The UK's North Sea oil and gas sector supports 200,000 jobs in the UK and generates around £15 billion for the Treasury. The industry supports more than 200,000 jobs – 90,000 of which are in Scotland –  and generates £15 billion for the Treasury (Energy Voice, 28 May 2023, link; Energy Voice, 28 May 2023, link).

• Labour's ban on new oil and gas will result in a £4.5 billion loss in tax takings over the next 10 years. ‘Labour's ban on new North Sea oil and gas will create a £4.5 billion black hole in the public finances that will have to be filled by higher taxes, the Energy Secretary has warned' (The Daily Telegraph, 16 June 2024, link).

Labour's oil and gas ban could lead to blackouts:

• Companies in New Zealand has been forced to import coal following the ban on new oil and gas, including energy supplier Genesis Energy. ‘In an ironic twist, companies such as the energy supplier Genesis Energy are having to import coal, which has higher emissions' (The Spectator, 17 June 2024,link).

• Unabated gas will still be required until 2035, without which ‘we would likely run an increased risk of blackouts'. ‘We will need unabated gas in 2035 to play a small but important role when the wind does not blow or the sun does not shine. Our published Net Zero scenarios envisage a small but important role for unabated gas in 2035. Without a role for unabated gas, we would likely run an increased risk of blackouts' (Hansard, 23 April 2024, HCWQ 21425, link).

• Aurora Energy Research's report demonstrated that ‘gas will still be required in our system' by 2030. ‘Gas will still be required in our system to a degree, namely to provide energy security in times of low renewable energy generation and peak energy demand' (Policy Exchange, Decarbonising the Grid, 25 March 2024, link).

Importing oil and gas has four times the emissions:

• North Sea gas is four times cleaner than LNG imports. North Sea gas is four times less polluting than imported gas (NSTA, Press Release, 31 July 2023, link).