There is only one way Labour can win the North Sea oil and gas debate

When ministers go out to bat for the government’s position banning new drilling in the North Sea, there are two arguments that tend to be the focus. First, that oil and gas are traded on global markets – therefore fixing prices irrespective of UK production – and secondly, that the UK’s North Sea Basin is 90 per cent extracted and no new government policy is going to change that.

“It is a wrong argument to say that if we were to issue new licences today [it] would affect the energy prices we are facing because of the situation in the Middle East,” trade minister Chris Bryant said, when asked in a debate on the loosening of Russian oil sanctions if we should not also be trying to boost North Sea oil over war in Iran. Recent months have seen Keir Starmer, Rachel Reeves and even energy secretary Ed Miliband focus on a similar line.

It is certainly true that only by transitioning intensely towards renewables will energy bills no longer be dictated by the fluctuating prices of global hydrocarbon markets. What’s more, fourteen years of maximising drilling licenses under the previous government’s policy of “maximum economic recovery” only resulted in discoveries that would provide 36 more days of gas per year, such has been the decline of the North Sea Basin. But opponents can still counter by saying: “Well, that may be true, but it would not hurt to maximise extraction, even if the difference it will make is negligible.” ,

This is why a third argument becomes critical for the government, one based around the economic reality of climate action. In 2021, the International Energy Agency (IEA) released a landmark report on how the world can reach net zero emissions by 2050 – the UK’s current legally-binding climate target – it included the note that no new drilling licenses would be required for the world to have sufficient oil and gas to make sure that target is met.

While countries around the world have continued to, as Donald Trump has said, “Drill, Baby, Drill” like there is no tomorrow, the warning from the IEA still holds true to ensure a future without catastrophic climate impacts. It is particularly relevant for a wealthy country like the UK, which has for centuries now has grown rich off the back of fossil fuel-powered industry.

“Adopting a policy of extracting every last drop might bring the UK a tiny short-term gain, but it would send a message to every other country that they could do the same. Then we could be looking at a world of 4-5C of warming, which would mean civilisational collapse,” explains Ed Matthew, director of the UK programme at think tank E3G. A 1.5C climate change limit is the aspirational goal established in the landmark Paris Agreement of 2021 to prevent the most catastrophic consequences of global warming.

“Sorry if that sounds dramatic but it’s not an exaggeration,” Matthew continues. “Climate change is a scientific fact that has been so deeply researched now. We know what will come if we don’t address it.”

A world with uncontrolled climate change would create a cost of living crisis that makes today look like a walk in the park. One study shows that the global economy could take a $38 trillion hit per year by 2050 unless addressed, while another finds that incomes could be up to 40 per cent lower by 2100 than they would be in a world without climate change.

There are two fields in the North Sea which have already been approved for extraction, but that was blocked from last year by a Scottish Court. The judgement argued that the consents had been granted without a full assessment of their climate impacts.

The first of these, Jackdaw, is a gas field some 150 miles east of Aberdeen that is owned by Shell. The second, Rosebank, is an oil and gas field north-west of Shetland that is joint-owned by Shell and Norwegian state oil giant Equinor. Shell has, in recent days, been publicly calling on the government to sign them off.

Ed Miliband is soon due to make a decision on whether to approve these fields for production, with members of his party, including Rachel Reeves, indicating that they would support such a move. Their approval would also not contradict Labour’s election manifesto, which stated that while they would not issue new drilling licenses, they would honour those that already existed.

At the same time, research has shown that the fields would make almost no difference to the UK’s reliance on gas imports, with Jackdaw and Rosebank displacing only around two per cent and one per cent of annual imported UK gas demand respectively.

Some will argue that even this would be worth it. But there remains the bigger question for the government of whether that marginal gain in production would outweigh the broader principle of the UK signaling to the world that it has truly turned its back on fossil fuels to embrace the very real opportunities of the clean energy economy.

This article has been produced as part of The Independent’s Rethinking Global Aid project