Research has revealed that North Sea oil and gas companies are failing to shift investments to renewable energy. According to data from Rystad, three-quarters of offshore oil and gas companies in the UK plan to continue focusing solely on fossil fuel production until the end of the decade. Out of 87 companies, only seven intend to invest in renewable energy projects in the UK before 2030.
Despite industry claims that continued fossil fuel extraction is necessary to fund clean energy transitions, only two of these seven companies plan to allocate a majority of their investment portfolios to renewables by 2030. The analysis, conducted by the campaigning organization Uplift, exposes the industry’s reluctance to embrace renewable energy.
The Labour government has banned new licensing of oil and gas fields in the North Sea. However, existing fields will continue to operate, and potential fields in early licensing stages may proceed. Prime Minister Keir Starmer announced plans for the new Great British Energy company, which will focus on boosting renewable projects in the UK. The company will be headquartered in Aberdeen, the center of the North Sea oil and gas industry, symbolizing the government’s commitment to a “just transition” to clean energy.
Labour’s ban on new North Sea licenses has faced strong opposition from the industry. The Conservatives also attacked the ban during the general election campaign. However, research by Carbon Brief indicates that the ban will only slightly accelerate the North Sea’s decline, as most fields are already severely depleted.
Campaigners argue that the new data shows oil and gas companies have little intention of changing their business models. Tessa Khan, executive director of Uplift, criticized the industry for failing to fulfill its promises. She noted that the majority of North Sea operators are focused solely on profiting from dwindling oil and gas resources.
Khan warned that the lack of investment in clean energy would hinder the UK’s efforts to achieve net zero greenhouse gas emissions by 2050. Additionally, the failure to transition would negatively impact oil and gas workers, making it harder for them to find new jobs.
The industry’s reluctance to invest in renewables is having real-world consequences. Jobs supported by the industry have more than halved over the past decade as the basin has declined. Opportunities for supply chain companies to transition to green energy have also failed to materialize.
Khan called on Labour to resist industry demands for favorable treatment and instead focus on supporting genuinely green companies. She urged the government to develop a transition plan that prioritizes the needs of supply chain businesses, workers, and their communities.
A Department for Energy Security and Net Zero spokesperson stated that they are working with industry, workers, and unions to ensure a phased and responsible transition in the North Sea. The national wealth fund, backed by over £7 billion, will support green technologies, creating jobs and investment across the UK.