There are no mates' rates for North Sea oil

Supporters of more North Sea drilling cast it as the fix for Britain’s two biggest energy headaches: bills and security. But let’s take a look at the facts.

Start with energy bills. More drilling will not mean cheaper gas for households. There are no “mates’ rates” for British consumers from North Sea oil and gas operators - we get the same deal as everybody else. Oil and gas from UK waters are sold on international markets, with prices set by global supply and demand, which also means we are susceptible to international economic instability, making the UK less secure. Today, that means volatility driven by Trump’s actions in the Middle East. Before that, it was Putin’s war in Ukraine.

But there is a way to stop that dependence growing; simply lowering the amount of gas and oil we need in the first place. This is the vital fact so often missed out in the debate around the North Sea.

If the new Prime Minister wants to cut prices and protect British consumers, he’ll need to look elsewhere. Clear options are more pylons to move cheaper renewable power where it is needed, and support for households to install solar panels, batteries and insulation.

Once built, renewables run on wind and sun, which are free, and don’t have to pass through the Strait of Hormuz. No dictator, president or cartel can turn those off. They push gas power plants off the system, lowering wholesale electricity prices and reducing our gas demand. Which means lower, reliable bills and more security.

Lastly, North Sea output and jobs have been in decline for decades, even under a policy of ‘maximise extraction’, and with around 90% of the oil and gas already extracted, it will continue to decline, even by the industry’s own optimistic estimates. The fields left are smaller, harder and more expensive to develop - which is why they were left until last.

Ultimately, unless we shift to electric tech, heat pumps, and electric vehicles, we’ll become increasingly exposed to global events beyond our control, making us more vulnerable to gas price rises. Heating our homes, in particular, could be decided by the actions of other countries unless we begin to shift away from gas. All of this comes under net zero. These policies - and the clear benefits that come with them - are Britain’s path to genuine energy independence.

____________________

Jess Ralston is the Head of Energy at ECIU (Energy & Climate Intelligence Unit).

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk