Labour’s oil and gas announcement
The Labour Party have been in the news recently following Keir Starmer’s statement that the party would oppose all new oil and gas licensing should they win the next election. Commentators from all sides of the political spectrum have been weighing in on whether this policy shift is a good idea, what it will mean for workers, and whether it’s enough to meet our climate targets.
With the media storm around the announcement, it can be difficult to decipher what has actually been promised by Starmer and who has said what. Here’s a breakdown of what’s been going on.
What did Starmer say?
On 28 May, the Sunday Times broke the story that the Labour Party intends to ban all future licensing for oil and gas as part of their new energy policy. This was subsequently confirmed by party spokespeople with more detail on the Party’s energy plans added by Keir Starmer at a speech in Edinburgh on 19 June.
Is this a new commitment?
No. Starmer actually announced Labour’s plans to end future licensing rounds back in January, at a speech at the World Economic Forum in Davos. However, the media has really picked on it this time around. The recent stories have seen a confirmation of existing commitments, and a pledge to include them as part of Labour’s ‘national missions’.
Why do we need to stop oil and gas?
The need to phase out oil and gas is crystal clear. Energy experts and climate scientists in the International Energy Agency, Intergovernmental Panel on Climate Change and many more respected institutions have been saying with increasing urgency that in order to limit climate heating to 1.5ºC there cannot be any new investment in fossil fuel developments.
With the impacts of the climate crisis becoming devastatingly clear both in the UK and across the globe, now is the time to be taking decisive action.
What about Rosebank?
Since the Rosebank oil field already has a licence, but is yet undeveloped, Labour’s announcement won’t affect whether it goes ahead or not. Ed Miliband, Shadow Secretary of State for Climate Change and Net Zero, has previously said that Rosebank should not go ahead because it “won’t cut bills by a penny”.
However, Labour has confirmed that if Rosebank, or any other project were given permission to start production by the current UK Government, they would honour that decision and allow drilling to continue if they win the next election. This is highly problematic because research has shown that if we are to limit warming to globally agreed 1.5C, 40% of fossil fuels in already licensed fields need to stay in the ground, in addition to all undeveloped reserves. Because of the greater responsibility that the UK and other rich countries bear for causing the climate crisis, there is a duty under international law for us to do most to tackle this crisis. This means we need to phase out our fossil fuel extraction and use first. If all the oil and gas in Rosebank alone is burned, it will produce the equivalent of the combined annual carbon dioxide emissions of the world’s 28 lowest income countries.
Whoever is running the country must accept the reality that no new projects can be allowed to go ahead and set a clear end date for oil and gas extraction, to give clarity and focus on the transition to a renewable energy future.
What reaction has there been to Labour’s position?
The industry claims that the pledge has made potential investors uneasy about the future of oil and gas in the North Sea. This can be seen as a positive step towards a phase out of oil and gas in the UK, but it can understandably be seen by workers in the industry as adding an already uncertain future for their jobs.
The Labour Party needs to provide a lot more detail about how they will ensure a just transition away from oil and gas and put the interests of workers and communities at the heart of their policies. To do this, they should take their lead from the worker and trade union backed plan for a just energy transition, which sets out demands including:
- Clear accessible pathways out of high carbon jobs, and a training regime for safety not profit
- Investment in domestic manufacturing and assembly of renewables
- Ensuring safety, job security and fair pay across the energy industry
- Sharing the benefits of our energy system fairly, through public ownership, reorganising the tax system for public good and targeted public investment
What about Labour’s green investment pledge
A couple of weeks after the announcement on oil and gas licensing, Labour’s Shadow Chancellor Rachel Reeves announced that the party would water down their previous commitment to borrow £28 billion per year until 2030 for climate-friendly investments. Instead they will build up to £28 billion per year by the middle of their term, in what is a major backslide on a flagship pledge from Labour.
Finance for the ramping up of renewable energy, as well as energy efficiency schemes to reduce demand for oil and gas are essential for ensuring a just transition and a liveable future. While the original pledge of £28bn per year is good start, and should be used to nationalise or take stakes in strategic energy infrastructure, such as the grid and ports, and to invest in regional publicly owned renewable generation companies, much more is needed.
What else did Labour announce?
Starmer also revealed that Labour’s plan for a publicly owned energy generating company would be headquartered in Scotland. With the profit driven energy firms having demonstrably failed to deliver on climate action, or keep energy affordable for householders, public ownership clearly must be at the heart of any robust just transition strategy. Public ownership means that objectives like keeping peoples’ homes warm and bills affordable, and reducing environmental harm, can be prioritised over profit. If it is set up in the right way, Labour’s Great British Energy Company coming to Scotland could help bring decent green jobs in manufacturing, construction and retrofitting.
Reforming contracts with energy generators and putting conditions in place, which Starmer additionally committed to, will also help create decent green jobs here in Scotland, and across the UK.
What about the Scottish Government’s position on oil and gas?
Under Nicola Sturgeon, the Scottish Government was moving away from its longstanding support for drilling every last drop of oil and gas from the North Sea, and the former First Minister publicly opposed the Cambo project. The Government’s draft Energy Strategy and Just Transition Plan, which sets out what our energy system is going to look like over the next decade and more, published in January this year, consulted on whether to include a presumption against new oil and gas licensing, and raises the question of phasing out existing developments ahead of the end of their economic life. Decision making around licensing for offshore oil and gas is reserved to the UK Government, but the Scottish Government’s position on the matter would still have an impact on investor confidence and public opinion.
None of this is set in stone yet, so there is everything still to fight for. With a change in leadership in the Scottish Government, and signs of backsliding from the new cabinet, its crucial we keep pushing for what climate science, and climate justice demands.
The Scottish Government must unconditionally oppose all new licensing for oil and gas, and support revoking licenses for undeveloped fields such as Cambo and Rosebank. It must also get behind offshore workers blueprint for a just transition.