Andy Burnham made his first significant speech as Prime Minister assumptive this week, vowing to create a “No10 North” to relocate power from Westminster into the hands of the people and places who can use it best. Aiming for “good growth in every postcode” and greater devolution to each region of the UK, with Aberdeen and Dundee both name-checked, what might this mean for energy and oil & gas in particular?
 
Logically, directly empowering the Northeast of Scotland and other areas of the UK which support the oil & gas industry to go for growth should mean relaxing the current Labour policy of no new licensing and high taxation. A flurry of recent reports strongly support this. 
 
The Tony Blair Institute pulled no punches in its article “The Labour Party Is Playing With Fire Over Its Future and the Future of the Country” saying that we should prioritise cheaper energy and electrification over net zero and use what is left of our North Sea oil and gas resource to do so, arguing this is a matter of energy security at a time of global geopolitical uncertainty.
 
The Robert Gordon University Energy Transition Institute’s report “Delivering Positive Energy” made it clear that an accelerated decline in oil and gas activity that is not matched by sufficient growth in offshore renewables will lead to stark consequences for the Northeast of Scotland and beyond. 
 
This is critical to the UK’s ability to be a “clean energy superpower” as it will be difficult to rewind the loss of a skilled workforce and expert supply chain, representing a permanent reduction in the UK’s ability to deliver the complex offshore energy projects critical to the energy transition.
 
In a similar vein, a report by Nick Butler (“North Sea Energy - a second life”), published by Gordon Brown’s “Our Scottish Future” think tank, says that whilst North Sea oil production will inevitably decline over time, that should not mean turning our backs on an industry that continues to provide jobs, investment and energy security. Instead, we should use existing infrastructure to accelerate investment in renewable energy while maintaining secure domestic oil and gas supplies during the transition. Doing so suggests Scotland and the wider UK could attract significant new investment and create wealth.
 
Burnham wishes to bring “Manchesterism” to all parts of the UK, empowering the public and private sector to drive investment and decision making to localities. Aberdeen is crying out for such a framework. A global industry has been hampered by uncertainty. Jobs, skills and investment in this sector are mobile, they will continue to leave the area and not return without clear direction, with the risk of damaging energy security, economic growth and the transition to a sustainable energy future for Britain.
 
If Andy Burnham becomes the new tenant of No10 (the one in London, that is) he may be well-advised to greenlight the final consents for Rosebank and Jackdaw and quietly leave the oil & gas elements of the Energy Independence Bill in the pages of Hansard and out of the statute books.