The progressive case for North Sea licences

For Ed Miliband, this could be a “Nixon goes to China” moment

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Thank you to everyone who has subscribed to Arguably. Below, David Lawrence, the co-founder of the Centre for British Progress, explains why issuing new North Sea licences is more progressive than it first appears. Today’s column is paid but you can read it by signing up for a seven-day free trial.

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Faced with the question of whether the UK government should approve new North Sea oil and gas licences, both right and left are guilty of overstatement and obfuscation, or simply a lack of interest in the facts.

On the right some talk as though, were it not for woke, the North Sea could solve Britain’s energy needs and bring down prices for decades. This is false. Since the 1970s, the UK has extracted the equivalent of 50 billion barrels of oil from the North Sea. What remains in “proven and probable” fields, i.e. those which are likely to have oil to tap, is less than 6 per cent of what has already been taken out. Prices are set globally, so Britain is a price-taker.

Increased production won’t directly lower energy bills for ordinary households without state intervention, such as using oil and gas revenue to subsidise costs. It also takes 5-20 years for new fields to actually deliver gas – by which time the UK will hopefully be much less dependent on fossil fuels. The North Sea is not a quick fix.

But many on the left, for all their claims to be “following the science”, have been equally lax with the truth. It is not clear that extraction would increase carbon emissions. Those who have been quickest to claim that extraction doesn’t affect prices have failed to acknowledge that, if they are right, additional extraction would also have zero impact on emissions. If prices are unaffected, there is no reason to think consumption would rise, and therefore neither would emissions.