It’s not North Sea oil vs renewables. The UK needs both

Anyone who regards energy policy as a sideline of government, in which high principle transcends pragmatic politics, is being offered a rapid learning course. Every household and business is affected and the only ultimate safeguard is security of supply.

Instead of thoughtful reappraisal, we see polarised positions being reinforced. Nigel Farage and his acolytes portray the conflagration as proof positive that everything to do with net zero should be abandoned. Just drill, baby drill, in our own backyard.

This is an incredibly stupid position which benefits from having a saloon-bar appeal. It is not net zero which is driving up prices at the pumps but a crazy war – for which Reform UK are cheerleaders without regard for consequences. And of course, it again exposes vulnerability to global disruption of energy supplies.

READ MORE: UK net-zero strategy 'wearing thin' with public, says report

Half right, half entirely wrong

At the other end of the zealotry scale, the preferred response is to double down on renewables and insist triumphantly that new licences in the North Sea would not make any difference since it would take a decade to extract anything. And by then, we will be a land protected by wind and sunshine. Oh no, we won’t.

The truth which neither camp can countenance is that both are half right and half entirely wrong. Of course we should push ahead with net-zero policies, while admitting the constraints of delivery and cost, and of course we should also maximise production from what is left of the North Sea, while recognising its inherent limitations.

There is no contradiction between these positions and never has been. If attitudes harden in response to the very real events in the Middle East, rather than lead to consensus about the need for a balanced energy policy and how to deliver it, another opportunity will have been missed for pragmatism to prevail over half-baked ideologies.

The undisputed fact is that the UK economy will, for the next 30 years at least, depend heavily on gas – no matter what we do about renewables. Within that context, the debate is not about whether we need gas but where it should come from. Since it is equally accepted that there won’t be much left in the North Sea by 2050, that debate is finite, so we need to plan ahead.

READ MORE: Why UK should follow Norway's example to protect itself against global oil price crises

The Norwegian example

As North Sea production declines, the imperative to reduce dependency on gas, which is a net-zero objective, will also mean reducing dependency on imports, which is a security of supply imperative. The two strategies are entirely consistent with each other, if rationality is applied.

At present, about three-quarters of our gas comes from the North Sea – about a third of that from the UK sector and the rest by interconnector from Norway (which is continuing to issue new licences for exploration and development as if they were going out of fashion). Nobody seems to have told the Norwegians that this is a mortal sin.

It was difficult before this month to explain why importing gas – mainly from Norway but also from the four corners of the earth – makes more sense than producing as much as we can, for as long as we can. Now, I would suggest, that is impossible to explain. To continue insisting otherwise is playing into the hands of the other extreme, by pitting North Sea production against the net-zero agenda.

Amidst all the other pressures this war will place on the Treasury, there is a renewed need for the Chancellor to incentivise rather than deter investment in the North Sea for as long as there is an industry to sustain. And the implication for jobs should be no small consideration. The opportunity exists to compromise – stick with the energy transition while also responding to events.

Increasing public reluctance

Meanwhile, what about the other side of the equation – the development of renewable energy on a scale that will deliver the net-zero targets and facilitate a decline in fossil fuel dependency?

On this, the report card is distinctly mixed – not because the government isn’t trying hard enough but due to practical constraints of time, cost and public acceptance. In a confused landscape, there is an increasing reluctance to accept that commercial ambitions should trample on community concerns, with little discernible reward in return.

The ScotWind programme is the prime example of this. These licences were sold off by the Scottish Government for a fraction of their value with no provision for community benefit. None of them is certain to proceed because, over the next few years, they will have to compete with each other for subsidy, as well as clearing myriad planning objections.

Highland hydro revolution

With a decade to plan and prepare, the whole thing is a lottery. Instead of arguing about the North Sea, the political priority of recent years – particularly in Scotland – should have been to put in place a clear strategy that people could buy into and be inspired by, as was once the case with the great hydro revolution in the Highlands. The contrast is stark.

The longer the Middle East war lasts, the greater the pain will be with more reason for relief and a little gratitude that we have not been dragged directly into it. Some of the consequences, however, are inescapable and it would be a consolation to think there might also be a few positive opportunities capable of emerging.

One of these could be to create a consensus around the need for energy security – an evolving concept which requires political flexibility in response to real world events. An awful lot depends on it.