Energy Secretary Ed Miliband is facing mounting criticism from industry and trade unions after refusing to reconsider the UK Government’s stance on new North Sea drilling licences amid rising geopolitical tensions and energy prices.
Unite the Union — which represents thousands of oil and gas workers — has urged ministers to immediately approve the Rosebank oil field and Jackdaw gas field developments, warning that blocking projects threatens jobs and energy security.
The union’s intervention comes as the escalating conflict involving Iran pushes oil and gas prices higher and fuels concerns about the stability of global energy supplies, while industry leaders say the government is “in denial” about the role domestic production must play in the UK’s energy mix.
Speaking to the BBC’s Sunday with Laura Kuenssberg programme, Mr Miliband said the government would not “learn the wrong lessons” from the crisis and insisted issuing new North Sea licences would not lower bills for UK consumers.
“We’re not going to learn the wrong lessons of this crisis,” he said.
“The price of gas is set on the international markets, whether it comes from the North Sea, which is an important resource, or is imported.
“There is one lesson from this crisis, and only one in my view, for the long term on energy policy – and that is we need homegrown, clean power that we control.”
Pressed on whether the government would reconsider its resistance to new drilling licences, Mr Miliband reiterated Labour’s position.
“If there is one lesson we must learn from this crisis, it is that we cannot keep being on this fossil fuel rollercoaster,” he said.
“The best thing we can do is clean homegrown power.”
Industry backlash
Energy leaders in the north-east have strongly pushed back against the government’s stance, arguing that the conflict has highlighted the risks of relying on imported oil and gas.
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, accused the Energy Secretary of ignoring the role domestic production must play during the transition to cleaner energy.
“The Energy Secretary has our unequivocal support for his drive to speed up renewable energy projects, but he is in denial about the importance of North Sea oil and gas production while we make that transition,” he said.
“His position – which has been heavily criticised by the country’s biggest trade unions this weekend – cannot stand.
“The past few weeks have underlined why the UK must create the conditions for greater activity in the North Sea – producing more of the oil and gas we need from our own waters rather than relying on costly, higher-emission imports during a period of geopolitical instability.”
Mr Borthwick also reiterated calls for reform of the windfall tax regime, warning that changes could unlock up to £50billion of investment in the basin.
Union calls for project approvals
Sharon Graham, general secretary of Unite, said the government’s current approach risks both jobs and national energy security.
“The government’s position on oil and gas is putting jobs and national security at risk. Blocking oil and gas production in the North Sea, especially now is simply an act of monumental political self-harm. Domestic gas from Jackdaw and oil from Rosebank are essential for jobs and for energy security.”
She added: “We cannot let go of one rope before we have hold of another. With energy and fuel bills set to rocket once again we need to stop offshoring our carbon responsibilities and fund a concrete plan for commensurate jobs.”