What the King’s Speech must deliver for the transition away from oil and gas

An opportunity to legislate for no new oil and gas

The new Labour government has been elected with making Britain a clean energy superpower at the heart of its mission, including a commitment to stop issuing licences to explore new oil and gas fields. Implementing this commitment would make the UK the first major oil producing G7 country to ban exploration and is an essential step on the path towards a fairer and more resilient energy system.  

The UK’s legislative framework currently actively encourages new oil and gas exploration and extraction, underpinned by a legal objective to maximise the economic recovery of petroleum (MER). Reforming the UK’s approach to oil and gas regulation is therefore essential to deliver the government’s clean energy mission. The proposed Energy Independence Bill could be a landmark piece of climate and energy legislation and provides the ideal vehicle for removing legislative barriers to the transition, including legislating an end to new oil and gas licences, reforming the North Sea Transition Authority so it is positioned to support the energy policy of a new government, and removing MER from the statute book. 

Labour’s manifesto also committed to ensuring a responsible transition in the North Sea. Alongside legislative action to end oil and gas exploration, the government must act now to develop a plan for a well-managed transition which offers high-quality well-paid jobs and local prosperity for oil and gas workers and affected communities. 

‍Why does this matter?

Drilling for more oil and gas is not the solution to secure, affordable energy 

• After 50 years of drilling, the North Sea’s reserves are too depleted to meet UK demand. The UK has burned most of its gas, and exports 80% of its oil. As a result, licences for new oil and gas fields are expected to provide just four days worth of gas a year on average between now and 2050. Even BP’s ex-CEO has said that North Sea drilling is “not going to make any difference” to Britain’s energy security.
• Increasing domestic oil and gas production would also not lower energy bills, with oil and gas prices determined on the international market - a fact that the former Conservative government energy secretary publicly admitted. 
• The best way to permanently lower bills and create a fairer and more resilient energy system is to insulate homes, accelerate the build-out of homegrown renewable energy, and manage the transition of the oil and gas sector. Given the impact of volatile gas prices on households, polling shows strong public support for renewables and improved energy efficiency in homes over new oil and gas. 

Workers and communities deserve a managed and fair transition into clean industries 

• The transition away from oil and gas production is already underway, as North Sea’s reserves decline. Over the past decade, the number of jobs supported by the oil and gas industry in the UK has more than halved, despite new fields being approved. 
• The decline in oil and gas sector jobs has not been effectively offset by increased jobs in other parts of the energy sector, revealing a failure to invest in transitioning the workforce – over 90% of whom want a clear path out of high carbon jobs. 
• Workers and communities are already enduring the social and economic consequences of an absence of policies to manage the transition, underscoring the need for concrete policy offers for a just transition and a comprehensive transition plan for the North Sea. Much of the responsibility for the North Sea’s transition has been handed to the oil and gas industry, which has prioritised industry profit over the interests of workers and communities. Instead, the government needs to work alongside unions and Holyrood to seize the opportunities of the transition to clean energy. 
• Getting the transition right, especially in relation to key locations such as the Port Talbot steelworks, the Grangemouth oil refinery, and the transition of the North Sea, will be essential to show that Labour can be the party of both jobs, economic and energy security and climate.

The UK must match its global climate promises with action at home 

• The climate crisis is accelerating, spurred by the overproduction of fossil fuels. 2023 was the world’s hottest year on record, with extreme weather events causing devastation across the globe and here in Britain. Wetter weather than usual is impacting UK farmers and posing a threat to food production. 
• Numerous energy experts and climate scientists including the International Energy Agency and the Intergovernmental Panel on Climate Change have repeatedly warned that new fossil fuel infrastructure and developments risk breaching the Paris Agreement’s temperature goals. The UK government’s own climate advisory body has stated that expanding fossil fuel production is not in line with the UK’s net zero target.
• At COP28, the UK joined nearly 200 countries in committing to “transition away from fossil fuels”. Ending new oil and gas licensing would begin to fulfil our promise on the global stage, restore the UK’s reputation as a climate leader, and demonstrate our responsibility to vulnerable nations as a historical emitter, whilst responding to widespread public opposition against new oil and gas at home. For example, the campaign against the Rosebank oil field provides a clear signal from hundreds of thousands of people across the UK in support of an end to new oil and gas fields in UK waters.  

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