Labour’s latest net zero folly could cost them the next election
The party's fundamental lack of understanding continues to shape its energy policy
Aberdeen has been home to the UK’s energy sector for over fifty years, keeping the lights on and helping £400 billion flow to the Treasury.
Through good times and bad, in one of the harshest operating environments anywhere in the world, we have been the engine room of the British economy.
Our world class oil and gas sector employs over 215,000 people throughout the UK; it should be praised as an economic essential.
But this week, Sir Keir Starmer and the Labour party have sought to make it the bogeyman of Britain.
Their fundamental misunderstanding of the energy transition, and the role of hydrocarbons within it, has resulted in a policy folly of potentially election-swinging proportions.
The switch to greener energy is an exciting opportunity for this region – in fact, nobody is better placed to take advantage of the potential economic benefits that it presents. However, we are also at greatest risk if our policy makers get this wrong.
A report published last year by the Robert Gordon University estimated that 17,000 jobs could be lost in the Aberdeen region by 2030 if we don’t get our steps in the right order here. And that is why people here are angry.
They are angry at the lack of public understanding about where their energy comes from, and they are angry that many of our politicians seem not to care either.
They’ve witnessed a Conservative windfall tax starving the industry of investment and strangle it through to 2028, despite energy prices falling back towards more historic norms.
They have also had to endure the Scottish Government, under Nicola Sturgeon, proposing a “presumption” against new oil and gas development.
And just as we appear to have persuaded the SNP to move away from this job-destroying policy, Labour has embraced it and gone even further.
We have invited the Labour front bench to Aberdeen on three occasions this year, yet no visit has been forthcoming.
The party’s engagement with the industry also appears to be limited – so I’m struggling to understand how they can come up with solutions to something as complex as the energy transition without speaking to the people and companies that will deliver it.
The policy they propose, as it stands, is economic self-sabotage which is not grounded in the realities of the energy transition. And the lack of engagement, in my view, is beyond contempt.
We do need to cut emissions, and we are. The UK’s national emissions have fallen from 950 million tonnes in 1990 to 400 million tonnes in 2020, due largely to the shift from coal to gas.
The path to net zero as we make the next step in this transition requires four things – and they span business, government and the public at large.
First, we need to reduce demand, and that involves everyone. Right now, three-quarters of the UK’s energy consumption is derived from oil and gas. That’s what is fuelling 24 million homes with gas boilers, 32 million vehicles fired by diesel and petrol, and the power stations generating more than 40 per cent of our electricity.
Second, we need to develop new sources and ways of storing energy – such as hydrogen and offshore wind – to help us further diversify our energy mix.
Third, and perhaps most importantly, we need the public and government to understand and accept that this could easily take two, perhaps three decades, to deliver.
And fourth, it requires us to find the most efficient way to source oil and gas in the meantime. And that is the North Sea.
The UK’s own climate change committee acknowledges that oil and gas will still meet a large share of our energy demand over the next decade. Even in 2050, it will still be in significant use.
If we don’t invest in new North Sea fields – including many which are already accounted for in the UK’s carbon budgets – production levels could well fall by 80% over the next decade and we will be leaving British oil in the ground while importing tens of billions of pounds of it from other parts of the world.
Just to be clear, importing often means liquefying gas via a carbon intensive process and putting it on cargo ships and moving it from places like Qatar and the US to the UK.
That does not tackle the climate crisis or contribute to net zero – quite the opposite. It makes little economic sense, and even less environmental sense.
So as politicians north and south of the border scramble around for a position on oil and gas, I will offer one up for nothing: If the alternative is importing oil and gas from overseas, at a greater carbon cost, then we will always favour domestic production.
It’s simple, it’s pragmatic, and it’s green. I really hope they listen.
Ryan Crighton is Policy Director at Aberdeen & Grampian Chamber of Commerce. DT.
