The North Sea Future Plan - a Blueprint for the Transition?

Amid all the noise surrounding November’s Budget, the government quietly published its plan for the future of the North Sea. 

This briefing looks at the plan – which sets out to balance the dual imperatives of tackling climate change and ensuring good, long-term clean energy jobs, investment and growth – and asks if it is enough to ensure the UK has a ‘just transition’.

In brief‍

• After decades of failure to plan the UK’s energy transition, this is the first government to publish a strategic plan to manage the future of the North Sea.

• It aims to grow a successful offshore clean energy industry in tandem with transitioning away from oil and gas in line with the UK’s climate obligations.

• Alongside previously announced policies, the plan features measures to grow clean energy jobs and to support oil and gas workers into new roles, developed and overseen by a new North Sea Future Board, with trade union representation.

• It confirms the government’s commitment to end new oil and gas exploration licences to ensure the basin is aligned with safe climate thresholds.

• Despite these welcome steps, this is the moment for the government to be as ambitious as possible, to make sure that energy workers and their communities come out of the UK’s shift to clean energy more secure and prosperous than today.

Decades of failure to plan

In the past decade, the number of jobs supported by oil and gas have more than halved as the North Sea basin declines - that’s more than 200,000 fewer jobs than in 2013 - and this is despite a policy of maximising economic recovery, with the previous government approving new fields and issuing hundreds of new licences.

The North Sea is now a mature basin with dwindling reserves that are no longer economically viable without vast state support. Gas in particular is in steep decline: in just five years, more than two-thirds of the UK’s gas needs will be dependent on imports, rising to over 90% by 2050 - and that’s even if new fields are approved.

Despite the obvious decline, there has been a failure to properly plan the UK’s energy transition - with previous governments adopting a principally market-led approach, and handing much of the responsibility for driving the North Sea’s transition to the industries involved. 

A step change under this government

This is the first UK government to set out to properly manage the UK’s energy transition, both the decline of oil and gas and the North Sea’s future in clean energy so that it delivers for workers and the country. 

Since it has come into office, the government has taken a number of steps designed to both grow the number of jobs in clean energy to replace those being lost in fossil fuels, and to address some of the barriers to oil and gas workers transitioning to renewable energy.

The North Sea Future Plan is a further step, setting out the government’s vision and objectives for the basin, and is built on two fundamental tenets: the moral obligation to support workers and communities, and the moral obligation to act on climate.

Growing clean energy jobs: The plan builds on a series of previously announced policies to create more good clean energy jobs, notably October’s Clean Energy Jobs Plan, the UK’s first strategic plan which aims to almost double the number of clean energy jobs (both direct and indirect) to 860,000 by 2030; as well as the Great British Energy £300m supply chain fund to support domestic offshore wind manufacturing; and the Clean Industry Bonus, which rewards offshore wind developers that target their investment in deprived areas of the UK or in cleaner supply chains. 

The new plan will see the introduction of a new North Sea ‘jobs service’ to support workers into new roles, and a new North Sea Future Board, which will have trade union representation and will oversee delivery of the plan and develop further support for supply chains.

Managing the decline of oil and gas: The plan confirms that the UK will issue no new oil and gas licences to explore new fields, a manifesto pledge of this government. This, it says, will send “a clear signal of commitment” to the goal of limiting global warming to no more than 1.5°C above pre-industrial levels.

The government is right to end the fiction of endless drilling - the scientific evidence is clear that new North Sea oil and gas fields are incompatible with liveable climate thresholds and the goals of the Paris Agreement, which the UK is a signatory to. 

More ambition needed to create a global blueprint

Despite these welcome steps - on clean energy job creation, infrastructure investment, and support for workers, as well as aligning the UK’s energy system with safe climate limits  - they are not yet sufficient to ensure that the UK’s transition is fair. More ambition is needed to achieve a ‘just transition’. This is also critical if the UK is to provide a blueprint for other oil and gas production countries to transition away from fossil fuels to meet climate targets.

‍Supply chains urgently need a plan: The first task of the North Sea Future Board must be to create a credible supply chain plan for the existing oil and gas supply chain to transition their operations, including tangible measures to support companies to diversify into renewable energy, manufacturing and other sectors. As the majority of oil and gas jobs are in the supply chain, the smoothest transition for these workers is to keep their jobs and for their companies to seamlessly shift from servicing the oil and gas industry to servicing other, long-term industries. This includes creating a tailored advisory hub and targeting investment to oil and gas supply chain firms to pivot to new markets.

‍Workers need more support: The steep decline in the North Sea requires an increase in both the pace of change and level of support given to oil and gas workers. The new North Sea Jobs Service must go well beyond a simple careers advisory service, and take an active role in recruiting oil and gas workers into good quality alternative jobs.‍

New jobs must be high quality: Ensuring that the jobs workers are moving into in clean energy are of high quality is vital, and core to this is recognition of trade unions. The real test of the government’s announcements on quality jobs in renewables – and of the Fair Work Charter, which is being co-developed with the wind sector and trade unions – will be how many renewable energy companies commit to trade union recognition agreements and collective bargaining.  ‍

Build community wealth: Transition plans, whether at a local, regional or national level, must focus on building community wealth and ensuring the benefits of future North Sea industries are shared. Plans must bring tangible benefit to communities and workers currently reliant on the oil and gas industry. The benefits of new clean energy industries must be distributed to these communities, so that their experience of the energy transition is a positive one.‍

End all new drilling: Crucially, an end to licensing to explore new fields is a good start, but this government needs to stop all new fields, including the huge Rosebank oil field. No government can credibly claim to be committed to tackling climate change – and limiting warming to 1.5°C – while continuing to encourage more oil and gas drilling.