As the House of Lords prepares to debate the UK government’s Offshore Petroleum Licensing (OPL) bill today, environmental campaigners are calling into question the government’s use of figures showing the North Sea oil and gas industry supports 200,000 jobs.
Energy secretary Claire Coutinho has used the figure in parliament to argue the government’s OPL bill is necessary to protect jobs and strengthen energy security.
The 200,000 jobs figure is based on a report by Offshore Energies UK (OEUK), and includes direct, indirect, and induced jobs supported by the oil and gas sector.
Greens MP Caroline Lucas and Labour MP Lloyd Russel-Moyle have questioned the government’s use of the figure, requesting a breakdown of of the calculations behind it.
In a response to questions from Ms Lucas, energy minister Graham Stuart confirmed the figures quoted by the government were from the OEUK report, and said it “was necessary to use a wide range of data sources”, given the industry’s “diverse supply chain and regional significance”.
Mr Stuart said the OEUK figure is calculated by data analysis company Experian using government jobs data and through tracking expenditure.
According to the Office for National Statistics, the number of workers directly employed in UK oil and gas is around 27,600.
Campaigners criticise use of OEUK figure
Campaign group Global Witness said the government should not rely on unverified data “produced by companies with a vested interest” when making law.
Global Witness senior campaigner Jonathan Noronha-Grant said the government is “parroting industry figures” on the number of jobs in the UK oil and gas sector.
“The Conservative party has long been one of the oil and gas industry’s biggest cheerleaders, taking its money and giving away thousands of drilling licenses,” he said.
“The fossil fuel industry is in decline, and so it should be.
© Supplied by Harbour Energy“Rather than playing up the number of people who work for oil and gas companies, our government should be helping oil and gas workers to skill up and transition to greener industries like renewables, which offer better job security in the long-term and will help the UK improve its energy security and reduce emissions.”
Energy and Climate Intelligence Unit analyst Jess Ralston said it is important the UK government has certainty in the jobs figures it uses.
“Previously the industry has linked North Sea drilling to lower energy bills which the Government has said itself won’t help as international markets control prices,” Ms Ralston said.
Ms Ralston said the UK government should increase its investment in renewables, pointing to figures from a Robert Gordon University which show a potential 81,000 net jobs increase in the offshore energy sector.
“This is about people’s livelihoods,” she said.
“If the Government wanted to ensure job security the evidence suggests it should be trying much harder to boost offshore wind and helping workers transfer to an industry with a brighter future.”
OEUK figure used to ‘score political points’
Uplift executive director Tessa Khan said the government is using the OEUK figures to “score political points”.
“The decline in the oil and gas industry is clear and mirrors the decline in North Sea reserves, but having accurate, verifiable data on the number of jobs directly and indirectly supported by the sector is critical for understanding and properly managing the UK’s transition away from oil and gas,” Ms Khan said.
© Uplift“The government’s lazy reliance on industry data is indicative of its hands off approach to the transition in general.
“Instead of getting across the detail and coming up with a coherent plan, this government has abdicated responsibility for making sure workers and communities aren’t left behind to the market and an industry that prioritises shareholder returns over investment in jobs.”
Ms Khan said politicians need to take a “clear eyed look” at the oil and gas sector and where it is headed and “come up with a plan” to deliver a fair transition for workers and communities.
Meanwhile, End Fuel Poverty Coalition coordinator Simon Francis said the government should take OEUK’s jobs figures with a “pinch of North Sea salt” and called for a further extension of the windfall tax.
North Sea investment at risk
Meanwhile, in a report released today OEUK called for policymakers to make the UK’s energy sector an attractive place to invest.
OEUK market intelligence manager and report author Ross Dornan told Energy Voice: “We have an exciting opportunity in front of us, to grow our energy supply, grow jobs and cut emissions. We’ve got the people and the companies to do it, but we need the investment to make it happen.”
With the UK moving towards a general election, OEUK warned that unstable energy sector policies undermined confidence in the stability of the UK’s energy sector.
“We’ve had four tax regimes in two years and are staring at the possibility of a fifth by the end of this year,” Dornan said.
OEUK warned that windfall taxes, previously levied in the wake of rising energy prices, are no longer warranted as prices fall. Retaining and extending them make it difficult for companies to plan investments and raise finance. They also reduce cash flow, and with it, reinvestment opportunities.
“What we’re asking for is more stability, a more joined-up policy and a longer-term outlook, because that’s needed to give companies more confidence and certainty to move things forward.
“The issue is we have a global race taking place and if the UK doesn’t make an active choice, we could lose out on that.”
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