Full Breakdown
North Sea Drilling Debate: Energy Security, Costs and Climate in the UK and Norway
5/8/2026, 8:33:28 PM
Policy Shifts in the UK and Norway
The UK Labour government, which banned new North Sea exploration licences in 2024, is now facing pressure to revisit that decision as Energy Secretary Ed Miliband weighs the pending Rosebank oilfield and Jackdaw gas project licences granted under the previous Conservative administration. In parallel, Norway’s Labour-led cabinet announced the reopening of the Albuskjell, Vest Ekofisk and Tommeliten Gamma gasfields—closed in 1998—and a 19 billion-kroner programme to restart them by the end of 2028. Norway also opened 70 new offshore blocks across the North Sea, Barents Sea and Norwegian Sea, with applications due 1 September and licences expected in early 2027.
Background: Recent Energy Shocks and Domestic Policy
The February 2024 US-Israel strike on Iran removed roughly 10 percent of global oil supply, equivalent to an estimated 12 million barrels per day. Earlier shocks—including Russia’s 2022 invasion of Ukraine and the 2022-23 surge in oil prices—prompted the UK Office for Budget Responsibility (OBR) to note a weak link between North Sea output and tax receipts. Under the Conservative government, production fell despite lower taxes, and Labour’s 2024 ban was presented as a climate-aligned move.
Key Data on Production, Taxation and Employment
- UK output: ? 1 million barrels of oil + gas per day, projected to halve within a few years.
- Employment: ? 30 000 workers in the offshore sector, with indirect jobs halved 2015-2020.
- Waste gas: £300 million annually lost to flaring/venting, enough to heat ~570 000 homes (Green Alliance).
- Tax regime: 78 % headline rate (30 % ring-fenced corporation tax + 10 % charge + 38 % Energy Profits Levy).
- Reserves: 93 % of recoverable oil and gas already extracted; 218 million tonnes remain recoverable to 2050, but at higher cost.
- Storage: UK holds ~12 days of gas reserves versus 90 days in Germany; Rough storage facility (½ total capacity) remains under-utilised.
- Norway: 2.31 million barrels of oil-equivalent per day (? 9 % YoY increase); 19 billion kroner to restart three gasfields; 70 new blocks, 38 in the Barents Sea.
Official Government Positions
- UK Labour: Prime Minister Keir Starmer’s administration argues there is “no case for drilling” and stresses reliance on imports financed by tax revenue. Energy Secretary Ed Miliband is under pressure from Conservative MPs to approve Rosebank and Jackdaw.
- Conservative critics: Kemi Badenoch calls for scrapping the Energy Profits Levy, claiming the saved revenue could offset VAT and green levies on consumer bills.
- Norway: Prime Minister Jonas Gahr Støre said the reopened fields will “create great value for the community… contribute to Europe’s energy security and safety.” Energy Minister Terje Aasland added that new gas production “helps Norway maintain high deliveries in the long term.”
Criticism & Opposition
- Environmental groups: The Green Alliance warns that routine flaring wastes £300 million and undermines climate goals; Lars Haltbrekken (Socialist Left) called Norway’s plan “madness” and “greenwashing.”
- Scottish Greens: Co-leader Gillian Mackay stated new fields “will do nothing to lower bills and will only fast-track the climate crisis.”
- Industry analysts: Dr Ajay Gambhir noted the Energy Profits Levy reduces investment attractiveness, while Frontier Economics emphasized that domestic producers will not sell below international market prices, limiting any consumer-price impact.
Conflicting Estimates & Gaps
- Oxford Smith School modelling suggests extra tax revenue from increased drilling could save households £16-82 per year, far less than the £441 per year saved by a full renewable transition.
- Estimates for Rosebank and Jackdaw indicate they would replace only ~3 % of UK gas imports, with a 28-year average lead time to production.
- No consensus exists on how much waste-gas capture would offset household heating needs or on the net emissions impact of domestic versus imported gas.
Verbatim Quotes
- “We live in troubled times,” — Jonas Gahr Støre, Prime Minister of Norway
- “It shows that the government is once again blatantly ignoring environmental advice from its own experts,” — Lars Haltbrekken, Deputy Leader, Socialist Left Party (Norway)
- “The EPL undeniably reduces the attractiveness of investments for North Sea oil and gas companies, but it’s not straightforward to say whether those investments would be attractive without the levy,” — Dr Ajay Gambhir, Senior Research Fellow, Imperial College London
- “Ms Mackay said: “New oil and gas fields will do nothing to lower bills and will only fast-track the climate crisis.” — Gillian Mackay, Co-Leader, Scottish Greens
- “I would have thought that the Ukraine-Russia war would have been a great lesson for the UK to really invest in storage facilities,” — Dr Salvador Acha Izquierdo, Senior Research Fellow, Imperial College London
What’s Next
- Norway’s 70-block licensing round closes 1 September; licences expected early 2027.
- The UK will decide by late 2026 whether to grant Rosebank and Jackdaw licences and whether to amend the Energy Profits Levy.
- Calls for expanding gas storage, notably the Rough facility, are intensifying as the government evaluates long-term energy-security strategies.
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