Polarising Donald Trump's North Sea comments tapped into growing frustration - people must listen

The president’s remarks – delivered both in person and online to Prime Minister Sir Keir Starmer – will have raised eyebrows in Westminster. However, in the north-east of Scotland, where redundancies are mounting, his comments tapped into a growing sense of frustration.

He may be a polarising messenger, but his advocacy for the repeal of the Energy Profits Levy (EPL) aligns with what the data, the workers and the businesses on the ground have been saying for over two years – that the windfall tax is killing off a vital British industry and a crucial national asset.

According to data from Offshore Energies UK, 10,000 jobs have already been lost since the levy’s introduction by the Conservative government in 2022. Harbour Energy, the UK’s largest oil and gas producer, has since laid off 600 people in Aberdeen alone. These aren’t abstract statistics — they are highly skilled individuals, families, and communities being sacrificed on the altar of fiscal short-termism.

Worse still, the economic wreckage isn't even delivering the returns that were promised. Independent analysis from Stifel shows EPL revenues have consistently come in at the low end of government forecasts. Why? Because the supposed "windfall" they are taxing does not exist. Oil prices are down 50 per cent since the peak of the Ukraine crisis. Gas prices have collapsed by 80 per cent.

The result is a textbook case of policy failure. Tax hikes intended to boost revenues have instead triggered a collapse in investment, with over £20 billion of planned capital spending now cancelled or paused. Exploration activity has ground to a halt. Fields are being decommissioned prematurely. The UK is forfeiting not just jobs and tax income, but its energy security.

This shouldn’t just be of concern to those living and working in Aberdeen - this should alarm everyone, because the UK still needs oil and gas. Even in the most ambitious net-zero scenario, the country will require between 13 and 15 billion barrels of oil equivalent by 2050. Right now, we’re on track to produce less than four.

And that energy shortfall isn’t going to be filled by wind turbines and hydrogen pipelines overnight. The reality is that we are swapping cleaner, domestically produced energy for dirtier, imported alternatives.

According to the North Sea Transition Authority, gas extracted in the UK has less than a quarter of the carbon footprint of imported LNG. Yet we are allowing that domestic capacity to decline while increasing our reliance on higher-emission imports from the US and Qatar. It is environmental hypocrisy at its worst.

All the while, the UK government continues to claim we are “maximising value” from our domestic resources. But how? By driving capital offshore? By gutting the supply chain that is also needed to deliver renewables, carbon capture, and green hydrogen? By forcing energy companies to pay tax rates that, in some cases, exceed 100 per cent?

In 2024, Harbour Energy reported a pre-tax profit of £950 million. However, after accounting for an effective tax rate of 108 per cent, the company posted no net profit for the year. This level of taxation is without parallel in the UK economy. It’s not just unfair - it’s economically suicidal.

The UK’s approach also compares poorly to our North Sea neighbours in Norway. While their headline tax rate is similar, the Norwegian government supports exploration and shares risk through its fiscal regime. That’s why Norway continues to attract investment and why its energy sector is thriving. We, by contrast, have taken the opposite path – penalising production, scaring off capital, and hoping for different results.

What’s even more galling is that the levy is being used to fund Great British Energy – the new public clean energy company set-up by the Labour Party. According to Stifel, EPL revenues are set to collapse from £5.5bn to under £1bn by 2029. You cannot fund the future of energy by strangling the very sector that underpins it.

So yes, President Trump is right to shine a spotlight on this issue. But the solution isn’t a populist soundbite or a quick political win. It is a long-overdue dose of energy pragmatism.

That means abolishing the EPL – now – and restoring a stable, competitive tax regime that can unlock investment, extend production and retain the critical skills base we will need for the next generation of energy infrastructure.

It also means rejecting the false binary between fossil fuels and renewables. The future is not oil or wind. It is oil and wind. And hydrogen. And carbon capture. We need all of it. Everything, everywhere, all at once.

The UK cannot build a low-carbon future while dismantling the industrial engine required to deliver it. A managed transition must be just that – managed. And that means recognising the continuing role of oil and gas, treating our energy sector with the strategic seriousness it deserves, and stopping the ideological war against the basin that still powers Britain.

So, let’s take Trump’s call and translate it into smart, sober policy. Not because he said it, but because the facts demand it.

The North Sea doesn’t need special treatment, but it does deserve fair treatment. The alternative isn’t a greener future – it’s a weaker Britain.

- Ryan Crighton is policy director at Aberdeen & Grampian Chamber of Commerce.