The North Sea is taking up a lot of political oxygen at the moment.
From Wes Streeting to Kemi Badenoch, Nigel Farage to Donald Trump, the chorus of voices calling for more drilling has become notably louder. The Government’s manifesto commitment not to issue new oil and gas licences is now being blamed for a wide range of ills, from deindustrialisation and high bills to weak growth, energy insecurity and the decline of communities that once depended on the offshore economy.
Badenoch, for example, has presented North Sea drilling as “the answer to the energy crisis” and warned that net zero is deindustrialising Britain. It is a politically potent claim because it starts from real concerns: energy bills are too high, industrial electricity costs are a serious problem, and the UK is too exposed to international shocks. But it draws the wrong conclusion.
There is a serious argument buried in this debate. The North Sea still matters to workers, supply chains, energy security and the communities that have helped power Britain for decades. For as long as the UK continues to use oil and gas, there is a legitimate question about whether more of that demand should be met domestically rather than through imports.
But the North Sea is increasingly being presented as the solution to Britain’s energy problems – but that is the wrong approach.
The lesson of repeated fossil fuel shocks is not that Britain needs to double down on a declining oil and gas basin. It is that the country remains too exposed to volatile international fossil fuel markets. The only long-term solution is rapid electrification, more renewable energy, and more nuclear power.
What more drilling can and cannot do
Domestic production can support jobs, sustain supply chains, generate tax revenues and reduce some reliance on imported liquefied natural gas. In a more unstable world, there is also a basic energy security argument for avoiding unnecessary dependence on fossil fuel imports.
But there are significant practical limitations.
The North Sea is a mature basin. Most of its easily accessible oil and gas has already been extracted. There is still resource left, but the question is how much can be produced economically, over what period, and at what cost. That depends on geology, taxation, regulation, investor confidence and future demand. It is not simply a matter of turning the taps back on.
More importantly, even higher domestic production would not fundamentally change the price British households pay. Gas is traded through international and European markets. Britain is connected to those markets. The price paid by households and businesses is not set by whether a molecule of gas comes from the UK Continental Shelf, Norway, Qatar or the United States.
That is why the current debate is so misleading. More domestic production may change where some of Britain’s gas comes from. It will not detach British consumers from the wider gas market. It will not deliver US-style energy prices. It will not provide a permanent solution to high bills.
The wrong answer to the right questions
It is not hard to understand why this argument is gaining traction.
The North Sea offers a simple story: Britain has resources, Britain should use them, and doing so will mean cheaper bills, stronger industry and more secure jobs. Compared with the harder work of building new infrastructure, reforming electricity markets, expanding the grid, supporting households to electrify and creating new industrial supply chains, that message is much easier to communicate.
But the fact that the story is politically attractive does not make it strategically serious.
The real lesson of repeated fossil fuel shocks is that Britain needs to reduce its exposure to fossil fuels, not organise its energy future around squeezing more from a declining basin. The more oil and gas the economy needs, the more exposed households, businesses and public finances remain to international price spikes. That vulnerability is the problem.
Electrification is the future
The route to lower bills runs through electrification.
The Climate Change Committee has warned that the total additional cost of a single fossil fuel price spike on the scale of 2022 is likely to be as large as the total net additional cost of meeting the UK’s pathway to net zero across every year to 2050. In other words, the cost of staying hooked on fossil fuels is already being felt. Britain is paying for it through higher bills, higher inflation, weaker growth and greater pressure on the public finances.
The only durable way to reduce that exposure is to use less fossil fuel in the first place.
For households, that means electrification. The CCC’s latest progress report found that a typical household will see lower and less volatile bills overall if it has an electric vehicle and a heat pump, rather than a petrol car and a gas boiler, under current government policies. Since the latest fossil fuel price rise, the case has strengthened: the same CCC report highlights that a typical household with a gas boiler and petrol car could save around £1,210 a year by installing solar panels, switching to a time-of-use tariff, and moving to a heat pump and EV.
That does not mean every household can make that switch tomorrow. Many cannot. Upfront costs remain too high, electricity is still too expensive relative to gas, heat pump deployment is too slow, and too many people still lack access to affordable EV charging. But those are delivery problems. They are not arguments for abandoning the destination.
The same is true for the economy as a whole. Net zero is too often described as if it were a brake on growth. In reality, the clean energy transition is already becoming one of the UK’s most important industrial opportunities. The CBI’s recent report finds that the UK’s net zero economy is worth more than £100 billion, supports more than a million jobs, and is embedded across energy, manufacturing, construction, finance and professional services. The clean energy workforce is expected to grow substantially by the end of the decade, with opportunities in wind, nuclear, grids, hydrogen, carbon capture, heat pumps, retrofit and energy efficiency.
This is not deindustrialisation. It is a contest over what Britain’s next industrial base will be. And it will save us money in the short, medium and long term.
The North Sea should be handled seriously: remaining production should be managed, workers and supply chains protected, and oil and gas communities supported into the clean energy economy. It helped power Britain’s past and may still help manage part of the transition. But the future is electrification, renewables, nuclear, clean energy infrastructure and a managed, declining role for oil and gas. Anything else risks mistaking a short-term political argument for a long-term energy security strategy.
