UK business leaders call for 'reasoned debate' on the future of oil and gas

Top British business leaders have written a joint open letter to party leaders in Britain and Scotland, warning them of the risk of tens of thousands of jobs and shaken investor confidence in the wake of Shell pulling out of the Cambo oil field development earlier this month.

Understanding that the economic wellbeing of whole communities across the UK was hanging in the balance, the letter called for an end to new exploration that had shaken investor confidence and placed tens of thousands of jobs at risk. It called for a “reasoned debate” over the future of oil and gas in the UK.

The Cambo oilfield off Shetland is reckoned to hold hundreds of millions of barrels of oil. Shell, which had a 30 percent stake in Cambo, said earlier this month that it believed the economic case for investment was "not strong enough".

The letter, from Aberdeen & Grampian Chamber of Commerce, supported by The British Chambers of Commerce and Scottish Chambers of Commerce, has also been signed by 58 leading figures from business and civic life in Aberdeen.

"We must now pause and allow for a reasoned debate about our energy future to take place. At the same time, we urge politicians to reflect carefully on their public statements on oil and gas and the impact they have on investment in the industry. We must not create an adverse policy environment at this crucial moment in our energy transition journey,” the letter said.

The chief executive of Aberdeen and Grampian Chamber of Commerce separately told the BBC that oil and gas extraction supported thousands of UK jobs. Russell Borthwick said there was enormous potential for the renewable energy sector in the region, but he warned against a "knee jerk" reaction to climate change.

The joint letter highlighted the same issue – adding that statements calling for an end to new exploration "threaten the very basis of a fair and inclusive transition at the most crucial point in our collective journey to a net zero society".

"A transition, by definition, is a change of state over time," it said. "This is one of the most complex challenges we have faced in our history and it doesn't lend itself to a simple, 'Who's good, who's bad? Who's green, who's not?' approach. To characterise it in this way is overly simplistic.”

According to estimates by the International Energy Agency, global oil and gas demand will fall by 80 per cent by 2050, but at least 20 million barrels per day will still be needed.

“Therefore, there is no current future scenario where there is not a requirement for some oil and gas,” the letter said. “Meantime, it continues to be required for people to travel, heat and power their homes and for the manufacture of many everyday goods.”

Supporting the argument, Borthwick said that the UK had a shared interest in getting to net zero as quickly as possible, but over recent months the region has been portrayed as part of the problem rather than part of the solution.

“The reality is that the skills, people, and experience embedded in the north-east of Scotland have quietly been leading the way in moving the UK towards its net zero targets, without any intervention from COP26. However, turning the North Sea into a hostile investment environment today does nothing to support that transition. In fact, it does the opposite, driving investment and tens of thousands of jobs away to other regions of the world,” he said.

According to Deirdre Michie, chief executive of OGUK, which represents the UK's offshore oil and gas industry, for years to come, oil and gas needs to be part of the energy mix. “Right now, we need oil and gas for 73 percent of our total energy, and so the transition to carbon neutrality will be a huge and complex task. It will be far better for the nation and the environment if we source these fuels from around our shores rather than relying on even more imports,” she told the BBC.

Cambo’s majority stakeholder said it still planned to take the project forward, even as environmentalists claimed that such new fossil fuel plans are incompatible with action on climate change.

Siccar Point Energy is currently awaiting approval from the UK government to develop the field. Chief executive Jonathan Roger told British media that other countries including Norway were investing in new oil and gas alongside renewables as part of a transition to sustainable energy. “The UK is at risk of damaging its economy and increasing imports with a higher carbon impact if new developments are not brought forward during this time,” he said.