The UK should rethink its approach to oil and gas in the North Sea, allowing exploration drilling and easing taxes for the industry, according to a report from the Tony Blair Institute.
The report marks the latest criticism of the Labour Party’s current policy, which bans new exploration drilling in the aging North Sea basin and maintains a windfall tax until March 2030, despite industry calls for it to be replaced this year. The government led by Keir Starmer has committed to delivering both cheaper and cleaner power by 2030.
“In a world of rising energy demand, tighter public finances and intense geopolitical competition, the UK cannot afford to treat domestic production as a moral signal rather than a strategic asset,” Tone Langengen, senior policy adviser for climate and energy policy, said in the report published Friday.
Oil and gas companies operating in the British North Sea have criticized the Energy Profits Levy, introduced by the previous Conservative government after Russia’s invasion of Ukraine triggered a surge in energy prices. Although prices have since declined, the levy has been extended and increased several times, pushing the industry’s headline tax rate to 78% and dampening investment.
“Coupled with the ban on new exploration licenses and heightened regulatory and litigation risk around environmental assessments, this has sharply increased policy risk and driven capital out of the basin,” Langengen said.
The debate over what to do in the British North Sea has divided Westminster. Despite the political intensity, oil and gas accounts for only about 1% of the economy today, according to David Owen, chief economist at Saltmarsh Economics. Even if drilling picked up pace, many are skeptical that the UK could ever compete again on oil and gas. Its stretch of the North Sea is 90% depleted for commercial resources, according to Wood Mackenzie.
The Tony Blair Institute calls for scrapping the windfall tax and replacing it with a stable, long-term tax system that gives companies clearer rules and more certainty for investment decisions.
It also urges the government to end the ban on new exploration and reiterates an earlier recommendation to replace the UK’s clean power target by the end of the decade with a more gradual plan aimed at lowering energy costs.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
element
var scriptTag = document.createElement(‘script’);
scriptTag.src = url;
scriptTag.async = true;
scriptTag.onload = implementationCode;
scriptTag.onreadystatechange = implementationCode;
location.appendChild(scriptTag);
};
var div = document.getElementById(‘rigzonelogo’);
div.innerHTML += ” +
‘
‘ +
”;
var initJobSearch = function () {
//console.log(“call back”);
}
var addMetaPixel = function () {
if (-1 > -1 || -1 > -1) {
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
} else if (0 > -1 && 85 > -1)
{
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
}
}
// function gtmFunctionForLayout()
// {
//loadJS(“https://www.googletagmanager.com/gtag/js?id=G-K6ZDLWV6VX”, initJobSearch, document.body);
//}
// window.onload = (e => {
// setTimeout(
// function () {
// document.addEventListener(“DOMContentLoaded”, function () {
// // Select all anchor elements with class ‘ui-tabs-anchor’
// const anchors = document.querySelectorAll(‘a .ui-tabs-anchor’);
// // Loop through each anchor and remove the role attribute if it is set to “presentation”
// anchors.forEach(anchor => {
// if (anchor.getAttribute(‘role’) === ‘presentation’) {
// anchor.removeAttribute(‘role’);
// }
// });
// });
// }
// , 200);
//});
