CHAMBERS AND NORTH SEA TASKFORCE CALLS FOR URGENT ACTION

THE Taskforce is an independent body, supported by the British Chambers of Commerce, which has brought together representatives from supply chain business, academia, environmental groups, and trade unions. 

It also undertook a range of interviews with other interested parties, including industry bodies, NGOs, supply chain organisations, Government agencies, current operators and further trade unions. 

Its report looks at managing the transition from a North Sea dominated by oil and gas production to one which successfully exploits its potential for commercially viable renewable energy. 

Done well, a successful, just transition will hasten the journey towards net zero. It will also guarantee energy security, underpin the UK Government’s industrial strategy and protect the workforce linked to the North Sea.   

Done badly, it risks a rapid erosion of its infrastructure, and damage to a world-leading supply chain and skilled workforce, to the detriment of economic activity in communities across the UK.   

Currently there is a real risk of a faster than expected decline in oil and gas production, while wind and other renewable projects will take longer to fully develop.   

If this gap is allowed to open, there will be no viable industry left to transition over, and the window of opportunity is closing fast.   

The report makes a number of recommendations; calling on the Government to replace the Energy Profits Levy with a more proportionate tax regime, introduce a multi-annual framework to support the growth of renewables, set out a clear regulatory regime for exploration, provide clarity on spatial planning, and assess the skills and workforce landscape needed for a just transition. 

It also calls for the creation of a government-led, cross-agency North Sea Transition Committee and expansion of the North Sea Transition Authority’s (NSTA) remit to coordinate the delivery of the plan.  

Philip Rycroft, Chair of the Taskforce, said: 

“The North Sea is a tremendous asset for the UK. A successfully managed transition as the oil and gas basin matures to a renewables future is in the UK’s national interest, vital for good quality jobs, revenues to the public purse, energy security and the achievement of net zero. Getting this right should be a top priority for both the UK and Scottish governments. 

“The North Sea Taskforce has established beyond doubt that there are widespread concerns that a gap is opening up between the North Sea as it is now and as it might be. Government needs to act now to restore investor confidence in the future of the North Sea, treat this as a national mission and put in place a long-term and coherent plan for a just transition.”  

Reinforcing the importance of creating a long-term, integrated plan, Shevaun Haviland, Director General of the British Chambers of Commerce and Executive Director of the Taskforce, said:   

“The North Sea is a national asset which deserves national action. There is a delicate balancing act that must be carried out to secure its future. 

“But with the right approach it is possible to deliver economic growth, green jobs, energy security and climate leadership. This is not an either-or answer, it is perfectly possible to do all these things. 

“The financial landscape that underpins the North Sea’s future is critical; it must support investment rather than draining it dry. Getting the response right will add value to supply chains across the UK and generate the expertise needed for future projects around our coastline.   

“The geopolitical world around us is changing at a frightening rate. If we manage the transition well, it will provide a plentiful and reliable source of renewable energy and give the UK much greater security and economic stability.  

“The cost of getting this wrong is too great to ignore. The Scottish and UK Governments must join forces and work to protect this hugely valuable resource for future generations.” 

Dr Ian Kelly Chief Executive of Hull & Humber Chamber of Commerce, said:  

“As we saw with our recent meeting with Ed Milliband energy security and renewables are key for jobs and growth in the Humber and elsewhere in the UK and we need to fast forward these issues urgently”.

GMB Union National Secretary, Andy Prendergast, said: 

“This report sets out real-world proposals for the North Sea’s transition. It recognises the dangers for jobs and economic redistribution of an accelerated decline in UK oil and gas production and stresses the need to take greater domestic responsibility for meeting our climate obligations and strengthening energy security in an uncertain world. This is a credible intervention that government should embrace.” 

Taskforce member, Sarah Moore – CEO of Energy Logistics firm, Peterson, said:  

“This report comes at a critical time, and we have a unique opportunity to be clear as a country on what we want, what we can afford, and what we need to focus on to deliver what is best for our climate, our economy, our security, and our society.  

“A pragmatic pathway towards an all-source, balanced, and integrated energy system will unleash significant opportunities for the UK energy supply chain.  

“This prosperous and secure future can only be achieved by cutting though unnecessary levels of red-tape and the commissioning of a multi-annual, centrally coordinated, transition plan which unifies the vast number of stakeholders needed to get this right so we can thrive today to grasp the opportunities of tomorrow.”  

Taskforce member, Steve Gray – co-founder of undersea equipment developers, Ventex Studios, said:  

“The taskforce achieved remarkable consensus across academia, industry, unions and climate investors, who all agree that UK energy policy needs a fundamental reset to drive net zero and economic growth.  

“The UK taxes North Sea profits at 78% and has banned new domestic licenses, leaving us reliant on record amounts of unregulated and untaxed imports which carry up to four times the emissions of our domestic production.   

“The UK economy is being damaged, and jobs are being lost, dismantling the domestic supply chain required to build the next generation of offshore windfarms that will provide out future clean energy. 

“This economic and environmental self-harm must end, and I hope that the North Sea Transition Taskforce report can contribute to a fundamental reset in policy, driven by science and economics.” 

Taskforce member, Professor Paul de Leeuw, Director of Robert Gordon University’s Energy Transition Institute, said:  

 “The report’s findings provide a clear and constructive way forward at a critical time for the North Sea and for the nation’s energy security. The report should help inform government policy to secure the future of our world class workforce, supply chain and energy ecosystem. It will be key to act swiftly to drive meaningful change.” 

Taskforce member, Trevor Garlick, independent consultant, said: 

“The UK’s world-class offshore supply chain is at risk. Investment is declining in the oilfields at the same time as windfarms are deferred. The energy transition can be an investment and growth opportunity; but the UK and Scottish Government need to work at pace with industry to deliver a more integrated, long-term North Sea plan.” 

A copy of the full report can be found here.