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The energy secretary has gone from a staunch opponent of Rosebank to its reluctant architect. His final decision will weigh up the PM, the public and his heart

https://www.thetimes.com/uk/politics/article/ed-miliband-oil-and-gas-north-sea-vx6ln9r6w

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The government insists it is too early to say how Miliband will rule and all decisions will be made on a “case-by-case basis” — but the politics suggest that a way will be found to give them the go-ahead. Failure to do so would infuriate the GMB union, which is concerned that thousands of jobs could be lost in the North Sea.

A green light would have a significant climate change impact. Rosebank would release an estimated 129 million tonnes of CO₂ over its lifetime, Simon Evans of the website Carbon Brief has calculated. Green group Uplift estimates that Jackdaw would add a further 32 million tonnes. UK emissions last year were the equivalent of 384.2 million tonnes of CO₂.

What this means for Britain’s legally binding carbon targets will depend on how much of the resulting oil and gas is burned domestically. Miliband previously said that 80 per cent of Rosebank’s oil would be exported, so only a fifth of it would add pressure on domestic carbon targets. It’s unclear how much of Jackdaw’s gas would be used in Britain, as it would be fed into the gas network and end use cannot be tracked. Some could be exported.

Decisions by Miliband are expected this autumn. The timing could be awkward for Labour, with the approval landing around the same time as Miliband and other ministers fly to Brazil to trumpet the UK’s emissions-cutting plans at the next UN climate summit, Cop30.

Environmental groups such as Uplift and Greenpeace could also launch legal challenges based on how Miliband has interpreted the new guidance written by his department. They have won before, such as a landmark Supreme Court ruling one year ago.

It’s unlikely Just Stop Oil would reverse its decision to effectively disband due to any approval but many former JSO activists have said they are exploring other avenues for climate activism. A green light would likely galvanise any new group that wants to rise from the ashes of JSO.

There remains another big outstanding question. Will Labour make good on its manifesto pledge of banning future projects? It is promising a consultation on the flagship measure this year but may be unwilling to make a final decision before Scottish elections next year, given the importance of the oil and gas industry in Scotland.

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to doing that, when you potentially have the opportunity to divert your own domestic supply and give yourself more strategic resilience?”

Producing more oil and gas domestically also brings other benefits in a crisis.

In a scenario where the Iran-Israel conflict spreads, one of the biggest worries will be the prospect of shipping in the Strait of Hormuz seizing up.

Around one fifth of the world’s oil passes through this vital trade artery. “If it’s disrupted for any protracted period of time, then either global demand needs to fall substantially – which means a pretty deep recession – or the price of oil has to go up to ration it,” says French.

In such a time, Britain would face higher oil and gas prices like every other country. But as a producer, it would also benefit from higher tax revenues, giving the Government more firepower to boost the flagging economy.

For example, when the invasion of Ukraine sparked an energy crisis across Europe in 2022, the UK’s tax take from company profits also jumped from £2.6bn to £9.8bn, providing valuable cash for schemes to support households with their bills.

“If the Exchequer feels that it needs to cap the price of energy, as it did previously, it rather helps if you’re getting higher corporation tax receipts from the North Sea,” adds French.

Another factor to consider is the impact the Government’s windfall tax and licence ban will have on decommissioning, the process of safely retiring spent or uneconomical oil and gas wells. Analysts at Wood Mackenzie and Stifel have both argued that Labour’s policies will speed up the rate of closures.

This could make life harder for Rachel Reeves, the Chancellor, because oil and gas firms can offset decommissioning costs against their corporation tax bills.

As a result, squeezing the North Sea may deal a double whammy to tax receipts by cutting output and accelerating decommissioning.

This is partly because oil and gas firms continuously drill new wells alongside old ones to improve the economic viability of their portfolios as a whole. Without the ability to keep drilling new wells, it becomes harder to continue drilling old ones economically.

“If you were to continue to licence, then that extends the life cycle of some fields, and therefore decommissioning comes later in the fiscal horizon,” says French. “So you would start to rebuild more fiscal headroom than you might otherwise have – and one thing the Chancellor definitely needs, going into the autumn, is more fiscal headroom.”

Mr Miliband’s claim that cutting domestic oil and gas production is good for the planet may also be in doubt.

This is because unless Britain also slashes demand for these fuels substantially, it will simply have to import larger quantities from abroad.

And that could actually end up generating higher carbon emissions overall, if we continue to rely on larger and larger amounts of liquefied natural gas (LNG) from the US and t

Labour’s plan to ban new drilling risks making Britain vulnerable to geopolitical crises

https://www.telegraph.co.uk/business/2025/06/16/how-the-death-of-the-north-sea-has-left-britain-vulnerable/

Israel’s war with Iran is drawing attention to oil prices again, as the world watches nervously for disruptions to global supplies.

The conflict has turned attention back to Labour’s proposed ban on new drilling in the North Sea, one of the party’s most eye-catching policies in last year’s election. The pledge not to issue new oil and gas licences is based on “science”, according to Ed Miliband, the Energy Secretary, amid projections that licensing any new fields globally would be incompatible with net zero targets.

In its election manifesto, Labour also argued that allowing more extraction from the North Sea “will not take a penny off bills, cannot make us energy secure and will only accelerate the worsening climate crisis”.

It was a premise that was questioned by some experts but won praise from others, as well as from environmental campaigners.

But critics warn it risks leaving Britain more exposed to geopolitical crises.

It’s no secret that the North Sea is in decline. Whether Labour presses ahead with a ban on new licences or not, Britain’s oil and gas output will continue to fall. But while that fall is inevitable, the rate of decline is not.

The independent Climate Change Committee estimates that there will be demand for between 13bn and 15bn barrels of oil and gas in the UK over the next 25 years. Under current policies, less than one third of this overall demand is expected to be met by domestic production. That is equivalent to about 4bn barrels, with an estimated 3bn that could be exploited left underground.

The balance would come from foreign imports.

Mr Miliband has said boosting production would bring no material benefit to consumers because oil and gas prices are set by international markets and the output of the North Sea is too small to make a difference.

But while many economists agree up to a point, some say this argument misses the importance of energy security.

“As long as you are a big importer, it doesn’t make sense to reduce your production,” says Bjarne Schieldrop, analyst at SEB Research.

“What you need to do is to reduce your consumption as fast as possible. Energy has become more politically sensitive in recent years, with Russia using energy as a weapon. “So actually, security of supply is extremely important. It’s not just about the price.”

Simon French, chief economist at Panmure Liberum, adds that if Britain and Europe produce more oil and gas collectively, they will be less dependent on supplies shipped from the Middle East in a crisis. In a global supply crunch, it is still unlikely that the UK would be at risk of shortages given its ability to outbid poorer countries for shipments when prices rise.

However, French adds: “Why would you leave yourself so exposed t

(continued)

Mrs Badenoch admitted during last year’s Tory leadership contest that her party’s decision to extend the tax had been a “mistake”.

However, she is expected to go further during her first speech to the Scottish Tory conference as UK leader by calling for the EPL to be scrapped immediately.

She will say: “When the oil and gas windfall tax, the energy profits levy, was brought in, the oil price was near a historic high, at the exact time as energy bills for the British people were sky-rocketing.

“But there is no longer a windfall to tax. It has long gone. And the longer this regressive tax on one of our most successful industries remains, the more damaging it becomes.

“Labour have extended and increased this tax. They are killing this industry. And, frankly, if it is allowed to remain in place until 2030, as is Labour’s current plan, there will be no industry left to tax.”

She is expected to conclude: “Thousands will have been made unemployed, and all while we import more gas from overseas – from the very same basin in which we are banned from drilling. So today I say enough.”

Mrs Badenoch said Labour must “speed up the process of replacing it with a system that rewards success and incentivises investment.”

The Tory leader will argue that the Government should instead “champion our own industry” by overturning bans on further exploration, and supporting oil and gas technology exports.

“We must let this great British, great Scottish, industry thrive, grow and create jobs – ensuring our energy security for generations to come, driving growth and making this country richer in the process,” she is to say.

“Scotland at the heart of our energy future for the next generation as it has for the last.”

Dame Jackie Baillie, Scottish Labour’s deputy leader, said: “The Tories are on the side of oil and gas giants rather than working Scots, but Scottish Labour will work with the UK Government and use devolved powers to deliver a just transition for the industry.

“With Kemi Badenoch desperately attempting to rally the few remaining Scottish Tories, it seems like it won’t be long until they can fit all of their MSPs in a single taxi.”

Gillian Martin, the SNP Energy Secretary, said: “The Scottish Government is clear in our support for a just transition for Scotland’s valued oil and gas sector, which recognises the maturity of the North Sea basin and is in line with climate change commitments and energy security.

“We are deeply concerned at recent announcements of planned job losses in the North East and have called on the UK Government for the earliest possible end to the Energy Profits Levy (EPL) – which was supposed to be a temporary measure.

“We also continue to call on the UK Government to approach decisions on licensing and consenting for North Sea oil and gas projects on a rigorously evidence-led, case by case, basis – with climate compatibility and energy security as

Tory leader accuses Labour of ‘killing’ the industry at Scottish party conference

Kemi Badenoch will call for the windfall tax on North Sea oil and gas to be scrapped.

The Conservative leader will say that the energy profits levy (EPL) on oil and gas profits could no longer be justified, and there would be nothing “left to tax” if it continued.

In her keynote speech to the Scottish Tory conference in Edinburgh, Mrs Badenoch will accuse Labour of “killing” the industry.

She will also warn that thousands of North Sea workers will be made unemployed under Government plans to keep the levy in place until 2030.

Mrs Badenoch will say in her speech that this would also mean importing more oil and gas from overseas, before concluding: “Labour must remove the energy profits levy.”

She is also expected to repeat her demand for Energy Secretary Ed Miliband to lift his ban on issuing new exploration licences, amid warnings that 1.5 billion barrels of oil could be left under the seabed.

Her intervention comes ahead of next year’s Holyrood election, with the Tories trying to woo thousands of North Sea workers based workers in Aberdeen, the oil capital of Europe.

They are facing a strong challenge from Reform UK, which has lambasted Labour’s green energy agenda.

Nigel Farage visited the city last week, and said that efforts to achieve net zero were “complete and utter madness”.

The windfall tax was first proposed by Labour in opposition, but was adopted by the Conservative government under Rishi Sunak in 2022 in response to the surge in oil and gas prices caused by the Ukraine conflict.

Mr Sunak initially said it would only remain in place while the windfalls lasted. However, he – and then Labour – subsequently decided to retain it, even though oil prices have fallen from a peak of $139 a barrel to about $70 now. The North Sea transition taskforce, backed by the British Chambers of Commerce, warned in March that this was “throttling” investment.

Analysts Stifel estimated that the “self-defeating” tax will cost the Treasury £3 billion in tax receipts between 2025 and 2030.

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