Tony Blair calls on Labour to keep drilling for oil in North Sea
Sir Tony Blair has joined President Trump in attacking government plans to phase out the production of North Sea oil and gas, saying more drilling is vital to secure the UK’s future prosperity.
In a move that will infuriate Ed Miliband, the Tony Blair Institute (TBI) called on Sir Keir Starmer to lift the government’s ban on new oil and gas exploration licences and cut the crippling tax rates imposed on the industry. It warned that the “reality” was that oil and gas would have to remain part of the UK’s energy mix for “many years to come” and the country could not afford to treat domestic production as a “moral signal rather than a strategic asset”.
Ed Miliband
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Miliband, the energy secretary, led the drive to scale back North Sea oil production against criticism from unions and the Tories who warn it will cost jobs, cut tax revenue and do nothing to curb global carbon emissions.
The report, backed by the former prime minister, echoes criticisms made by the US president who described the North Sea as a “great asset” that the UK should exploit. “They’re sitting on top of the North Sea, one of the greatest reserves anywhere in the world. But they don’t use it,” Trump said. “And they like to say, ‘Well, you know, that’s depleted.’ It’s not depleted. It’s got 500 years. They haven’t even found the oil. The North Sea is incredible.”
President Trump said that the North Sea was “one of the greatest reserves anywhere in the world”
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The TBI did not endorse Trump’s claim but it did say that the North Sea basis had around 7.5 billion barrels of oil and gas that could be extracted — worth £165 billion. It said this would provide the government with a “long-term” tax base that could provide revenues for “decades”.
“An energy strategy that ignores revenue, security and political consent in pursuit of symbolic purity will not endure and will not deliver the climate outcomes it promises.”
Adam Bell, a former senior civil servant in energy policy, said it made sense to extract oil and gas from the North Sea while Britain remains dependent on fossil fuels. “Extracting it from the North Sea is lower carbon than importing it as liquified natural gas.”
Yet Michael Grubb, a professor of energy and climate change at University College, London said Starmer’s government should stay the course in not issuing new licences because “it gets more and more difficult to squeeze more and more out of the North Sea. One of the key things is to retrain the North Sea industry into the growing sector of clean energy”.
An oil rig in the North Sea, which was described by Trump as a “great asset”
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That would give “a really clear direction of travel” to the UK energy industry, he said. “If you try to do everything, you’ll do none of them properly.”
The TBI also renewed its attack on the government’s drive to source 95 per cent of electricity from renewables and nuclear energy by 2030, saying that it should instead focus on cutting bills.
It added that the government’s target was leading it to pay over the odds for renewables. Its biggest auction for offshore wind, concluded last month, is expected to have a neutral impact on bills. But the TBI’s senior policy adviser Tone Langengen said this was unacceptable when Britain’s electricity bills are among the highest in the world.
“This is not a departure from the UK’s commitment to reach net zero by 2050,” she wrote, “but a recognition that delivering it will depend on building an energy system that is affordable.”
Government advisers at the Climate Change Committee have said that if Britain is to end its contribution to climate change by 2050, it will have to electrify many devices powered by fossil fuels, replacing petrol cars with EVs, and gas boilers with heat pumps. Langengen argued that lowering the price of electricity was the best way, even if it meant building more gas plants.
Grubb said the TBI was “living in a fantasy land” if it thought new gas plants would lower bills. “If you look at the government’s estimates, the cost of a new gas turbine is around 50 per cent more than the cost of recent wind energy contracts.”
The Department for Energy Security and Net Zero said: “Our clean power mission is the only way to bring down bills for good. The alternatives leave Britain dependent on petrostates and dictators whose control of fossil fuel markets helped drive the cost of living crisis.”