Burnham’s Dilemma: The North Sea Oil Industry’s Last-Ditch Plea

The UK Labour government is set to take office soon, with one of its first major decisions being whether to approve new oil and gas drilling in the North Sea. This decision has far-reaching implications for Britain’s energy security, industrial competitiveness, and climate goals.

At stake are two major projects: Rosebank and Jackdaw. Both were granted licences under the previous government but remain stalled due to Labour’s manifesto pledge to ban new exploration licences. The industry is now appealing to Andy Burnham, arguing that Britain will continue to need oil and gas for decades to come.

The letter from Offshore Energies UK (OEUK) and its co-signatories makes a compelling case for more drilling. They argue that the transition to a lower-carbon energy system would be stronger and fairer if built on an all-energy approach, leveraging Britain’s industrial strengths rather than overlooking them. This is not just about oil and gas; it’s also about safeguarding sovereign manufacturing capability across the country.

The North Sea oil industry has long been a mainstay of British industry, providing good jobs for generations of workers. As Steve Elliott, chief executive of the Chemical Industries Association, notes: “Backing North Sea oil and gas alongside renewables is not about slowing progress; it’s about strengthening industrial competitiveness, protecting jobs, and reducing reliance on imports in an increasingly volatile world.”

However, this argument ignores the elephant in the room: climate change. The UK has pledged to meet its net-zero targets, but new drilling would only perpetuate Britain’s dependence on fossil fuels and undermine these efforts. Robert Palmer, deputy director of Uplift, a campaign group against North Sea drilling, warns that new drilling will do little for energy security unless accompanied by a rapid shift to renewable energy.

Burnham faces a dilemma: he has vowed to tackle deindustrialisation and support homegrown energy, but must balance this ambition with Labour’s climate goals. The party’s previous stance on North Sea drilling was clear: no new exploration licences. Now, it seems that some within the government are willing to consent to Jackdaw, at least.

The consequences of this decision will be far-reaching. If Burnham approves new drilling, he risks undermining Labour’s credibility on climate change and perpetuating Britain’s reliance on imported gas. This would have significant implications for energy security, industry competitiveness, and jobs. Louise Hellem, chief economist at the CBI, notes: “Years of loading policy costs onto electricity bills have left UK businesses facing some of the highest electricity costs among the world’s biggest economies.”

Ultimately, this decision is not just about Burnham or Labour; it’s about Britain’s future. The country needs a clear and consistent energy strategy that balances economic and environmental concerns. A more comprehensive approach to energy policy is urgently needed, one that prioritises British industry, jobs, and climate goals.

As Burnham prepares to take office, he must navigate this complex landscape with caution. The UK cannot afford another decade of indecision on energy policy. It’s time for a clear vision, one that puts Britain’s energy security, industrial competitiveness, and climate goals at its heart.