Majority Of UK Business Leaders Back Government Policy To End North Sea Oil And Gas Licensing

1:00 AM 26th November 2024

business

New analysis has shown that the majority (70%) of UK business leaders are in support of Labour’s policy to end new rounds of oil and gas licensing in the North Sea.

The research, commissioned by Uplift and conducted by Public First, reveals positive business sentiment towards the green transition, as the vast majority (77%) of senior business leaders surveyed believe that phasing out fossil fuels is in the public interest.

Three quarters of UK business leaders think that the decision to ban new rounds of oil and gas licensing sends a strong message about the UK Government’s commitment to the energy transition. This figure rises to 81% among leaders from businesses identified to be ‘energy intensive’.

The long-term benefits of the UK Government’s decision to stop new licences for oil and gas exploration in the North Sea were recognised by those surveyed, with more than half (54%) predicting that the policy will positively impact their business over the next ten years.

Respondents identified reduced energy costs and a more reliable energy supply as key benefits the policy can deliver.

The findings come as the government launches a consultation on how to implement its licensing position over the coming months.

Positive business sentiment is echoed across Scotland, where the green transition will be most keenly felt. Despite Scotland’s historic ties to oil and gas, most Scottish business leaders (65%) support ending new licensing and a large majority (82%) are in favour of the UK Government’s wider plans to end the role that fossil fuels play in generating the UK’s energy.

Less than one fifth (19%) of Scottish business leaders think the UK Government is moving too fast on phasing out fossil fuels and almost half (47%) believe the pace to be too slow.

While more than half (52%) of Scottish leaders think that more jobs will be created in renewable energy for those lost in oil and gas, they did show concern about some of the challenges the transition may present, including the future prospects of regions that rely on oil and gas, such as North East Scotland.

Overwhelmingly, UK and Scottish business leaders think it is the government’s responsibility to support North Sea workers to transition to other industries.

Despite these concerns, the new UK Government’s efforts to ramp up ambition have not gone unnoticed. More than half (56%) of those surveyed think that Labour is clear on its plans to manage the phase out of fossil fuels in the North Sea and the majority believe that the UK will be able to move away from fossil fuels by 2050.

When asked about their perception, more than half (52%) think the new UK Government cares more about tackling climate change than the Conservatives. But despite broad positivity towards new UK energy, the vast majority (86%) of businesses say that private companies need more clarity from the government on what our future sources of energy will be.

Tessa Khan, executive director at Uplift commented:

“Ending new licensing is welcomed by businesses as a clear signal that the government is committed to the clean energy transition. Business leaders North and South of the border support the shift from oil and gas to renewables, recognising that it is good for the economy and their businesses, good for the climate and in the public interest.

“Oil and gas companies are now increasingly out of step, with most North Sea operators showing a commercial disinterest in the shift to clean energy: just seven out of the basin’s 87 oil firms plan to invest anything in renewables between now and 2030.

“When most of what’s left in the basin is oil for export, it’s no wonder business backs the transition to a clean energy system that can provide a reliable and less volatile domestic energy supply.”

James Alexander, CEO of UKSIF commented: “Volatile oil and gas prices have, for too long, sent energy bills soaring for businesses across the UK. Business leaders in every region are backing renewable energy to deliver stable, cheaper bills, and to unlock economic growth. It is increasingly dawning on investors that oil and gas companies that refuse to engage properly in the transition represent an unacceptable investment risk. Government signals like refusing new oil and gas licences in the North Sea give clarity to investors and can help drive more private investment into our clean energy sectors.”

Miriam Brett, Co-Director at Future Economy Scotland commented:
“North Sea oil and gas is now in steady decline, with jobs supported by the industry more than halving over the past decade – despite hundreds of new oil and gas licences being issued over this period.

“In other words, Scotland’s industrial transition is already underway. The challenge now is to ensure it delivers for energy workers, businesses and impacted communities.

“Looking ahead, there needs to be a coordinated approach between the UK and Scottish Governments towards strategic investment in infrastructures of the future, a roadmap to create a sustainable future for impacted workers and communities, and a plan to nurture a thriving domestic supply chain ecosystem.”