Will Labour ban new North Sea oil and gas licenses?

For more casual observers, it’s possible that the distinct climate action groups, Extinction Rebellion, Insulate Britain and Just Stop Oil, have become basically indistinguishable. Indeed, the new kid on the block, Just Stop Oil, is an amalgam of the Extinction Rebellion and Insulate Britain, formed on the basis of shared interest and belief in the urgency of halting new oil drilling in the North Sea – hence, Just Stop Oil. But, of the three groups, Just Stop Oil has been by far the most successful in attracting eyeballs via direct action and public stunts, with their most prolonged protest occurring at time of writing in the form of a month-long slow march through London (for which the group has been severely punished with a slew of arrests, including of high-profile members). Not only successful in gaining notoriety, the group has managed to force a mainstream debate on North Sea licenses, cornering the main political parties into making explicit (proto-manifesto) pledges on the issue in the long run-un to next year’s general election.  

Attempting to attract voters frustrated with Just Stop Oil’s antics, the Prime Minister Rishi Sunak’s Conservatives have announced new licenses for drilling in the North Sea – which, it must be said, is a move that has been discouraged by both the United Nations’ Environment Programme and the International Energy Agency. Labour, on the other hand, have opted to...well, it’s not quite clear.  

Last month, Leader of the Opposition, Sir Keir Starmer proposed to cease the issuance of new licenses for oil and gas explorations in the North Sea has triggered contentious debates and has raised economic questions. Under a Labour administration, oil and gas production would be sustained via existing wells, but all new licensing applications would be firmly declined. 

Detractors argue that Sir Starmer would therefore be endangering some 20,000 jobs, not to mention delivering a shock to population centres like Aberdeen, which are heavily reliant on the industry – indeed, Ryan Crighton, policy director at Aberdeen and Grampian Chamber of Commerce, has dismissed the proposal as an unrealistic scheme drafted without proper consultation with the industry that has been powering the UK for the past half-century. Other opponents suggest that such a move might effectively result in higher energy costs and discourage further UK investments. Others warn that it may lead to an overdependence on foreign energy supplies. In contrast, a Labour spokesperson expressed the party's staunch opposition to new licensing for North Sea oil and gas extraction, arguing that such moves fail to reduce costs, undermine the country's energy security, and could disrupt our climate goals. 

Sir Keir's proposal also extends to onshore drilling, reinforcing the idea that clean energy is a critical aspect of national security. Labour maintains that it will honour existing licenses but has promised to establish the publicly owned Great British Energy to promote cleaner industries and achieve net-zero targets. 

Other reactions to Labour's plan have varied, with David Whitehouse, the CEO of Offshore Energy UK, cautioning that a swift shift away from North Sea oil and gas could dissuade investment and increase the risk of energy shortages. On the other hand, Greenpeace UK's Philip Evans dismisses such concerns as "nonsense". 

But like so many of Labour’s recent announcements, all of this may soon be reversed. At a meeting in Scotland last week, Starmer’s speech sounded contradictory notes: 

“The moment for decisive action is now. If we wait until North Sea oil and gas runs out, the opportunities this change can bring for Scotland and your community will pass us by, and that would be a historic mistake. […] My offer is this: a credible plan to manage the change, protect good jobs and create good jobs […] to harness the wealth that is in our air, in our seas, in our skies, and use it to serve the interests of your community.”  

The Labour leader denied accusations of a policy shift, reiterating that oil and gas would continue to play a role in the UK's energy landscape until the mid-21st century and that he would not block a new Rosebank oil field or Shetland gas field. His recent comments have caused some anxiety among unions who fear that Labour's oil policy lacks clarity and could create uncertainty in the industry.   

Labour's plans do not include revoking any fossil fuel extraction licenses granted before the next General Election. Sir Keir has reportedly communicated this to various energy giants during a series of calls. 

After the government unveiled new licenses earlier this year, 115 are still up for grabs, with 76 different companies aiming to get a piece of the North Sea, including the Rosebank development, one of the largest oil and gas fields in the North Atlantic, expected to be greenlit in the next two weeks. 

Overall, Labour's commitment to a green energy transition is clear, but the potential impact on the North Sea oil and gas industry, jobs, and the UK's energy security is still a matter of debate. These are undoubtedly important considerations that will need to be carefully managed in the coming years.