Source · Select Committees · Scottish Affairs Committee
Recommendation 3
3
Accepted in Part
Domestic fossil fuel production maintains energy security and anchors jobs during transition.
Conclusion
We recognise that with time moving to clean energy improves the UK’s overall energy security. However, as fossil fuels are to continue to form part of the UK’s energy mix for decades to come, there are compelling arguments to meet as much of that need as possible from domestic sources. Easing the gradient of production decline means higher economic returns, lower emissions, and anchors jobs and skills in the northeast of Scotland, which will be necessary for the rapid growth of clean energy sectors. (Conclusion, Paragraph 54) 55
Government Response Summary
The government acknowledges the natural decline of the North Sea basin and rejects issuing new exploration licenses. However, it commits to managing existing fields for their lifespan and introducing new Transitional Energy Certificates to help ease the production decline and ensure economic viability.
Government Response
Accepted in Part
HM Government
Accepted in Part
The North Sea basin is highly mature. Oil and gas production has seen a natural decline of 75% between 1999 and 2024. As a result, the industry has lost around a third of its direct workforce over the last decade. This is why we are planning for the North Sea’s energy future, to ensure that the people and communities at the heart of its success continue to play a leading role for decades to come as we scale up new technologies. New licences for oil and gas awarded in the last decade have made only a marginal difference to overall production. Additional oil and gas licensing would not reverse the natural decline of oil and gas production in the North Sea basin or change the UK’s status as a net importer. To go backwards and issue new oil and gas exploration and production licences would not help our energy security. We want to show global leadership in climate action in line with the science and embrace the opportunities of the future as we drive forward the clean energy transition. In addition to not issuing new licences to explore new fields, the government has committed to managing existing oil and gas fields for the entirety of their lifespan and this will help to ease the gradient of decline. To meet this commitment, we are introducing new Transitional Energy Certificates to enable some oil and gas production in areas adjacent to already licensed fields, to help ensure they remain economically viable. This is a pragmatic step to help deliver a managed, orderly and prosperous transition in the North Sea’s declining oil and gas basin.