For five decades, the seas surrounding Great Britain supplied it with oil to power the country's transport system and gas for heating
At the same time, the British oil and gas industry stimulated the economy and injected £400 billion in taxes into the Treasury coffers, as well as creating 120,000 high-paying jobs. However, the sector is now on the brink of collapse, with downsizing becoming increasingly threatening.
Experts predict that at least 33,000 jobs, and possibly as many as 60,000, will disappear from the North Sea by 2030.
The natural decline of oil and gas reserves in the North Sea is key , with around 180 of the UK's 284 oil and gas fields due to close by 2030.
However, policy is also key.
The government's windfall tax, Labour's pledge to stop new drilling and protests from climate change activists mean oil and gas investors are turning their backs on Britain.
For environmental groups, it marks a major victory in their bid to replace workers positions in the oil and gas industry for new roles in renewable energy, especially offshore wind.
Unfortunately, it's not that simple, says Professor Paul de Leeuw, director of the Energy Transition Institute at Robert Gordon University.
He spent much of the autumn researching risks in the energy sector and briefing leading politicians from the major parties UK and Scottish Government.
He concluded that the oil and gas industry, or indeed the thousands of skilled workers it has created, will be essential to building the renewable energy systems of the future – and the UK is taking a risk lose too many of them.
“Over 90% of the UK oil and gas workforce has skills that can be transferred to the offshore renewables sector,” he says. “Preserving the offshore oil and gas supply chain, its workforce and associated skills over the next five years will be critical.”
“However, the UK's offshore renewable energy sector currently has limited capacity to accommodate the number of skilled oil and gas workers who will be impacted by the forecast downturn in the hydrocarbons sector before the end of this decade.”
Professor de Leeuw says that, If bad policy accelerates, the natural decline of the offshore oil and gas sector will also undermine net zero, wiping out part of the workforce best suited to build the energy systems of the future.
< p>The victims are already growing. Earlier this year, Harbor Energy, the UK's largest oil and gas producer, said it was abandoning new oil and gas projects in the UK and announced 350 job cuts.
Linda Cook, Harbor's chief executive, blamed This includes Britain's windfall tax, as well as Labour's promise to scrap investment incentives and block future drilling in the North Sea.
Last month, Apache – another large UK offshore operator with more than 630 staff – announced plans to cut a further 90 jobs. The company said it was “suspending all drilling work on North Sea platforms due to the UK's difficult financial regime and unstable investment climate.”
Contractors were also affected. Offshore Helicopters, which transports workers overseas from Aberdeen, Shetland and Denmark, has announced job cuts due to fewer workers.
Such losses have already hit the UK energy community hard. Aberdeen, which was the center of Britain's booming offshore industry in the 1990s, has lost hundreds of jobs.
Martin Jones, partner at accountancy group UHY Hacker Young, said Aberdeen had seen the slowest growth. household disposable income in the UK has increased by just 15.8% over the past decade. For comparison, the national average was 40%.
He says: “Slow growth in household incomes in Aberdeen is due to the region's links to the UK's troubled oil and gas industry, which has been hit hard by cuts in North Sea oil and gas production.”
House prices are also falling. The University of Aberdeen Business School's latest quarterly housing market report shows house prices in Aberdeen have fallen by 4.4% over the past 12 months.
The report said: “The downsizing of some major oil companies in the North Sea, including growing concerns over emissions, has weighed on confidence.”
Some fear the decline is just a trickle before a flood that could affect many other cities on the east coast of the UK where large numbers of energy workers live.
Professor de Leeuw says in a worst-case scenario, North Sea job losses could reach 60,000 by 2030, with the oil and gas workforce falling from 120,000 to 87,000 as a result of a managed transition.
Why Is oil and gas production in the UK generally falling? Part of the answer is that all the biggest and best oil and gas fields are already in production.
Even the largest reserves, such as the powerful Brent oil field, located northeast of Shetland, were depleted. Brent, like many others, is currently being decommissioned, with platforms offline and subsea oil and gas wells filled with cement.
Over the next decade, decommissioning could become a much larger industry than oil and gas. A spokesman for the North Sea Transition Authority (NSTA) said UK oil production would show a cumulative decline of 6% a year over the next decade.
“UK oil production peaked in 1999 and fell rapidly until 1999. In 2014, with only a few large undeveloped fields actively being considered for development, the decline is expected to continue, albeit at a slower pace, through 2050,” the spokesperson says.
On gas , the projected decline is almost twice as fast. “There are few new developments under consideration and exploration prospects are limited, so a rapid decline is expected until 2050,” adds an NSTA spokesperson.
For policymakers, the biggest battles are over licensing. Claire Coutinho, the energy secretary, plans to approve dozens of new exploration and production licenses in the coming months.
By contrast, Ed Miliband, her Labor Party shadow, has vowed to block all new licenses if his party wins. power.
But such squabbles and the political uncertainty they create are likely to spook investors – and are unlikely to be worth pursuing. The NSTA's own forecasts show that annual UK gas production will fall from 34 billion cubic meters (bcm) in 2022 to just 13 billion by 2030 and less than 5 billion by 2040.
New licenses could add about 4 billion cubic meters to production volume. These annual totals are useful, but will be far from enough to offset the decline.
However, such new work could bring enough new investment to protect oil and gas jobs while renewables reach full strength.
Katie Heidenreich, director of Offshore Energies, the offshore sector trade body, says maintaining jobs in the UK energy sector is a top priority.
“Preserving the offshore oil and gas supply chain, its workforce and related skills will be essential,” she said in a recent report. “People working in oil, gas and offshore wind are at the center of the energy system and will be vital to the success of the transition that will gain momentum later this decade.”
Currently in the offshore energy sector The UK industry employs around 150,000 people, and offshore wind employs around 30,000 people in addition to 120,000 in the oil and gas industry.
That balance is about to change, with up to 100,000 new jobs created. likely to be created by 2030 in the low-carbon sector, making it an ideal home for thousands of workers at risk of being displaced in the oil and gas sector.
If managed correctly, says Professor de Leeuw, a new workforce model will emerge, in which in which jobs will be concentrated around energy clusters that can provide hydrogen production, carbon capture and wind turbine construction.
A successful transition will see the UK marine energy workforce increase by 50% to 225,000 by 2030, he said. Failure to reach its full potential would see the workforce fall by around 15% to 130,000 over the same period.
“There is a huge prize up for grabs,” Professor de Leeuw said. “We want to equip decision makers—whether in government, industry or individual companies—with new insights to turn these opportunities into reality.”
But will this happen? The UK's energy history is full of unfulfilled promises, from Tony Blair's promise to create a new generation of nuclear power stations to David Cameron's Green Deal, which was supposed to isolate millions of homes but almost none of them were delivered.
Stephen Kerr, the Conservative member of the Scottish Parliament for central Scotland whose constituency includes the soon-to-close Grangemouth oil refinery, says the UK's oil and gas sector must be protected until environmental promises are realized.
“ These green jobs are not yet available in sufficient quantities,” he says. “And the jobs that are there are certainly not at the same income level as those that are disappearing from the oil and gas sector. So we need to put aside the fantasy and get down to reality.
“Political leaders who talk about tens of thousands of new green jobs in the future are misleading the public, who have no idea how far they have with the future in mind.”
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