‘Sheer fantasy’: Why drilling the North Sea for oil won’t lower Europe’s soaring energy bills. Escalating conflict in the Middle East has emboldened calls for the UK to open up North Sea drilling licences.

OK I fear I’m stepping into the lions den, but I come in peace. For clarity I work in the North Sea oil industry, I do not deny climate change, and I believe we do need to transition away from fossil fuel dependence.

What I disagree with is that the debate in the public sphere centres on “new licences for drilling” and “energy costs”.

Regarding new licenses the reality is that most of the viable acreage in the North Sea is already licensed. What isn’t licensed doesn’t have any prospects; we’ve run the seismic (at huge expense), evaluated it and determined there’s nothing there. We don’t want it.

What we want is the ability to develop what we know is there in existing licences, and currently that is difficult because of the 78% tax rate introduced through the Energy Profits Levy (the windfall tax), introduced in 2022 by the conservative government, and increased by Labour in their first year in office. We therefore support a fairer tax system, that increases the rate of tax when the price of oil is unusually high (like now), but applies a more reasonable tax rate when the price of oil is at normal rates.

So why should we develop this resource ? Well not because it will directly bring down electricity bills or the piece of petrol at the pumps. Nobody in the industry claims it will, that’s just the idiot politicians. The reason we want to develop it is because we’ll make money (obvs) but in doing so we will create investment in the UK, create and maintain jobs, and pay tax to the treasury. We will not eliminate oil/gas imports, but we could reduce them, and that improves our balance of trade. An improved balance of trade means a healthier economy, a reduction in the cost of government borrowing, and more money available for public services, investment in green technologies or paying idiot politicians more money (the choice on what they spend it on is there’s). If we don’t produce more and slow the rate of decline in domestic production we will import more, generate less tax, have a worse balance of trade, etc. And of course we need a healthy economy to achieve net zero, not only to attract investment and afford the necessary infrastructure investment, but for individual households to be able to afford convert to heat pumps, EVs, etc.

In producing more oil and gas domestically we will also see a slight reduction in GHG emissions. Admittedly the majority of GHG emissions arise from the combustion of fossil fuels, but those emissions are the same regardless of where the oil came from. However there are emissions associated with its production and the UK sector emits less GHG per barrel than production operations in other parts of the world. Not the best, but significantly better than the global average.

Now some may argue “well we need to move faster to net zero”, and perhaps we do. But for context the UK’s Climate Change Committee forecast that if we successfully achieve net zero by 2050, we will have consumed 14 billion barrels of oil (of which we will have only produced 4 billion ourselves). And the in 2050 we will still be consuming 250,000 barrels of oil a day. Net zero isn’t about no fossil fuels, it’s a about a significant reduction (for the UK about an 85% reduction from current levels). If we fully exploited our own resource the 4 billion barrels could become approx 7 billion barrels. That would be a positive for our economy and increase our chance of getting to net zero. More domestic production is not a silver bullet but every little helps.

I’m more than willing to engage in reasoned polite debate on any of the points I’ve made.