Ed Miliband is set to revise and soften the government's hardline position on North Sea oil and gas exploration, following a key recommendation from the University of Aberdeen's Professor John Underhill.
The energy secretary is poised to revise the government's ban on new drilling projects to boost jobs, ease the transition to renewables and cut or even eliminate reliance on imported energy.
Several Times sources close to Miliband expect him to approve "tie-backs" which would allow for exploration in new fields via adjacent existing fields.
The policy reflects a key recommendation from an independent review carried out by Professor John Underhill, director of energy transition at the University of Aberdeen’s Interdisciplinary Institute.
The review called for the government to "permit near-field and infrastructure-led exploration" by allowing bespoke oil and gas permits around strategic and critical infrastructure consisting of existing pipelines and fields to unlock modest but high-impact discoveries.
Reacting to the news, Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick said: “These reports hint at welcome small steps towards more flexibility on North Sea licensing.
“Such a move would signify acceptance that current policy measures are over-accelerating decline in an industry we desperately need to supply energy security in the here and now and will rely upon for many years to come.
“Allowing new developments to go ahead was one of the clear recommendations of the North Sea Transition Taskforce’s report earlier this year – an important piece of work supported by AGCC and the British Chambers of Commerce.
“And this was also the topic of a key intervention by University Director for Energy Transition and Professor of Geoscience at Aberdeen University John Underhill writing in the September edition of the Chamber’s Business Bulletin magazine.
“The unintended consequences of mass job losses and permanent supply chain damage are already leaving us at a competitive disadvantage in the transition and dependent on more imported oil and gas- which supports no UK jobs, pays no UK tax and is four times more carbon intensive than domestic supply.
“However, limited new development through tiebacks alone won’t solve the problem altogether and the industry will remain on a worrying trajectory unless we see accompanying reform to the fiscal regime and the end of the windfall tax from the next tax year as well as a level playing field on environmental impact analysis for domestic projects versus imports.
“The EPL in particular, continues to drive investment and jobs overseas and without its removal, the moves on enabling new activity which have emerged in the last few days may well end up being pointless.
“The government has the chance to show real courage – announce an early end to the EPL, watch investment flow into the North Sea and turbocharge our economy- with projections suggesting these policy tweaks can unleash £165billion of GVA over the next two decades."
The expected pivot from Miliband could extend the lifespan of the oil and gas sector in the North Sea, supporting 120,000 jobs across the UK.
Last month, OEUK (Offshore Energies UK) issued the stark warning that the government's fiscal regime and restrictions on the North Sea would cost the industry 1,000 jobs every month.
The other recommendations in Prof Underhill's review were:
- Strengthen regulation and stewardship
Eliminate routine flaring, incentivise platform electrification and support carbon storage to reduce emissions from domestic production. - Safeguard critical infrastructure
Ensure existing pipelines and platforms remain economically viable to prevent premature shutdowns and stranded reserves. - Support industry confidence
Provide clear signals that strategic projects can proceed to maintain investment, encourage economic growth, safeguard jobs and maximise tax revenues.
He said: said: “We all want to see a cleaner, greener future but we must also be honest about the energy reality today. The UK still relies heavily on oil and gas and without a clear and pragmatic plan, we risk replacing home-grown supply with higher-emission imports, something that is worse for the climate.
“The current policy contrasts with reversals seen in countries like New Zealand and the Netherlands, where domestic production has been re-prioritised in response to energy security concerns. Norway has also recently announced it will continue to issue oil and gas licences.
“A balanced, regulated approach can help the UK meet its climate commitments while ensuring energy resilience, economic stability, and smooth our transition to low-carbon renewables.
“Allowing the issue of bespoke permits for near-field or infrastructure-led exploration is a practical way to arrest an otherwise ever-increasing dependency on imports, provide support for the sector at a time of stress, enhance energy security, avoid the premature closure of critical facilities, reduce our impact on global emissions and help avoid an unmanaged, disorderly and unjust outcome for communities, be they based in Aberdeen or across the UK.”