Labour plan to stop all oil and gas development is mad

This week, the Sunday Times led with a story that Labour would ban all new oil and gas exploration in the UK North Sea as part of a “radical” plan to make Britain a “clean energy superpower”. The response has been predictable with various unions, chambers of commerce in the North-East of Scotland and the Conservative party sounding off about how Starmer is wrong, irresponsible and delusional.

In reality, Starmer is simply being pragmatic and dressing up the inevitable as bold and pioneering. He knows that progressive political parties in the UK are wholly and irrevocably committed to Net Zero and all that entails. The fact that their opposition to new oil and gas fields is mostly fallacious is by the by: they don’t want it and their leaders know it. Starmer is not going to spend his hard-earned political capital when he likely has a narrow majority on persuading his party to back something they are wholly opposed to. The reaction to the potential approval of the Cambo field last year shows that Labour and Green activists don’t want new fields developed. A better question is to ask why Starmer thinks it’s politically advantageous to ban something he was never going to do anyway.

The fact that Starmer has further enhanced his reputation as a political pragmatist is not news. Nor is the fact that this policy is deeply unwise. There is no question that the UK has all the potential to be a green energy superpower as Starmer wants. Indeed, the UK is already a leading renewable energy power as this column has pointed out many times. Even better, there’s potential for much more of the same with many more offshore wind fields in particular begging to be opened up. 

However, this doesn’t get Labour away from the inconvenient point that over the past year, the power mix in the UK has been 29% wind, 5% solar, 5% biomass,15.5% nuclear and 40% gas. That is one hell of a gas-shaped hole that the UK energy sector has to fill and that’s before we talk about problems with the intermittency of wind and the inconvenient truth that the sun doesn’t shine at night. If it was easy to get rid of fossil fuels, we would have done it by now.

So Starmer’s plan doesn’t work at the most basic level and would inevitably leave the UK bill-payers at the mercy of international gas prices for decades to come. And this is the point that Labour seems unable to grasp. There is no pathway to Net Zero in the UK that doesn’t include hydrocarbons. First of all, because the term Net Zero implies that there are always hydrocarbons in your energy mix and second, the UK will never have renewable power, as Norway does through its hydro schemes, that can provide consistent baseload power. 

If you accept this inevitability, then it makes no sense to ignore your own resources and not use both the oil and gas reserves and the expertise that you have at your disposal. Labour would respond by talking about the jobs and opportunities that the Net Zero transition will create and that’s undoubtedly true: the potential is vast. However, asking a well-established oil and gas sector to transition to a new and completely different industry is not something that can be done overnight through government “investment”.

On the other side of the House of Commons, the debate is a lot less delusional and simplistic. It’s not perfect by any means but the government’s Net Zero Growth Plan issued in March this year is not only a great deal better than the flabby and loose ambitions of the Johnson government but it is a plan steeped in the pragmatism of the other Captain Sensible of British politics, Rishi Sunak. In this version of events, “fossil fuels will retain a crucial role in the energy system, until there are credible clean energy alternatives that can replicate their role… natural gas will play a role for years to come, particularly in the hardest to decarbonise sectors.” 

The reaction to the plan when it was published was mostly hand-wringing and lamentations that it wasn’t ambitious enough. That may be so but the plan is, at least, deliverable which is a lot more than can be said for Starmer’s plan. In fact, when reading through the 126-page document on gov.uk, it’s hard to avoid the thought that the Labour leader may, in the end, have to take on those unpragmatic progressives in his party after all. Perhaps some money could be made betting on a cabinet showdown and an Ed Miliband resignation in 2026? 

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