Could new permits save the oil and gas industry in the North Sea? – BBC news

Environmentalists have campaigned to push governments to stop issuing exploration permits that allow oil companies to search for new fossil fuel discoveries.

The industry says that without new oil discoveries, the pace of industry decline will accelerate, putting jobs at risk.

It has now been 25 years since production in the North Sea peaked. In 1999, the equivalent of about 1.7 billion barrels of oil and gas was pumped ashore.

Production had fallen to 884 million barrels in 2010 and then fell further to 552 million barrels in 2022, a decline of about 67% from peak levels.

According to government forecasts, production will halve again to 251 million barrels in 2030 and fall to 58 million barrels in 2050 – just 3% of peak production.

That’s because when the oil boom arrived, we focused first on the largest reserves, the easiest to exploit.

Today, operators focus on the remaining smaller wells and use much more advanced (and expensive) techniques to extract them.

The North Sea Transition Authority estimates that there are still around 10 to 15 billion barrels of oil and gas available in the UK, but only around two billion of these are in areas where the UK government has not yet licensed issued to operators for exploration.

The suggestion that 100,000 North Sea jobs could be at risk without new exploration permits came from the Aberdeen and Grampian Chamber of Commerce.

Using data from investment bank Stifel, the company produced a report last month saying the next Westminster government had “just 100 days to save 100,000 jobs” in the sector in the UK.

During the general election campaign, the Conservatives and SNP have repeatedly claimed that by promising to end exploration permits, their opponents are risking 100,000 Scottish jobs.

The Conservatives fully support continued licensing, while the SNP say applications should be considered on a case-by-case basis.

Labor has said it will no longer issue permits and the Liberal Democrats believe the focus should be on creating more jobs in renewable energy, such as wind power.

The Scottish Greens would go furthest by revoking recently issued permits, including 54 permits granted in October and January.

Offshore Energies UK estimates that there are now just 60,700 people in Scotland working directly or indirectly in the oil and gas sector. That number rises to 120,000 across Britain as a whole.

Research by Robert Gordon University (RGU) estimates that in a worst-case scenario, the number of jobs lost in Britain’s oil and gas sector could reach 60,000 by 2030.

It predicts that even in the best-case scenario, with new licensing and recurring investment, some 33,000 jobs will still be lost as a result of declining oil and gas production.

So, by their estimate, the actual number of jobs ‘at risk’ is 27,000 across Britain, not just Scotland.

The industry argues that increased investment in future oil and gas production will directly impact the overall number of jobs that can be created in green industries, such as hydrogen and wind energy, as it keeps supply chains running.

RGU’s most optimistic forecast suggested there could be 104,000 jobs in the UK renewable energy sector by 2030 – but it said this could be as few as 36,000 if investment is low.

Offshore Energies UK says the sector is committed to investing £450 billion into the UK economy by 2040, with government support.

The industry says it can scale supply chain capacity, retain skilled jobs and provide energy security, all while meeting climate goals.

But let there be no doubt: this means they can keep drilling for more oil.