Following an initial evidence session in Parliament on the role
of the UK's refinery industry in the energy transition, the
Committee is launching a new inquiry and call for evidence on the
future of UK oil and gas.
Data from the oil and gas
industry shows that it directly supports around 26,000 jobs
across the UK and indirectly supports 95,000 more – through
offshore drilling, rigging, catering and scaffolding, and onshore
fabrication yards, anchor manufacturing, vessel maintenance and
more.
There are an estimated, further 84,000 jobs for hospitality
workers and taxi drivers that serve these industrial
communities.
The UK has of course experienced previous energy and industrial
transitions with the closure of its coal mines in the 1980s, and
more recently the closure of major steel manufacturing works. The
harsh experience of deindustrialisation has raised concerns that
large, skilled workforces may bear the brunt of moving away from
fossil fuels.
The successful redeployment of the workforce at the UK's last coal power plant
Ratcliffe may prove difficult to replicate for the
sector-wide transition away from oil & gas. Yet a key element
in delivering the energy transition will be to ensure that the
benefits from existing fossil fuel extraction can be utilised in
establishing the industry that will replace it.
In the initial session in Parliament on October 29, witnesses
from the industry highlighted the need to address the oil and gas
industry's fiscal environment. They reinforced the Scottish
Affairs Committee's conclusion that there needs to be a revision
to the Energy Profits Levy where “a lack of clarity on the fiscal
regime beyond 2030 has created uncertainty for industry in the
North Sea. The Energy Profits Levy at its current rate of 38%,
which brings the headline rate of tax to 78%, is seen by many in
industry as no longer proportionate”.
The Committee also heard a further call to ensure that refineries
were included in the Carbon Border Adjustment Mechanism, so they
could compete on a level playing field with foreign based
competitors in what is a global market.
The Committee is now launching a full inquiry into the role of
oil and gas in the energy transition, the management of the UK's
North Sea energy basin and how the transition away from gas in
home heating might be achieved. It will aim to:
- Make recommendations for creating a
long-term, credible North Sea Just Transition Plan for the
onshore and offshore workforce; including goals, parameters and
next steps
- Assess what role the government's
current policies, including the British Jobs Bonus and Great
British Energy, can play in delivering a just transition for the
North Sea, and
- Consider the risks of failing to
deliver this
- Identify any additional policy
mechanisms and institutions needed
- Determine how best to keep industry
engaged with the oil and gas industry as outputs decline
- Examine how gas might most
effectively be removed from home heating.
Interested stakeholders are now invited to submit evidence on any
or all of the following questions here by 7 January
2026.
- What should be the underlying
principles of the UK's strategic policy f… Following an initial
evidence session in Parliament on the role of the UK's refinery
industry in the energy transition, the Committee is launching a
new inquiry and call for evidence on the future of UK oil and
gas.
- How can the UK continue to make
best use of its oil and gas infrastructure as an asset while
meeting delivering the transition?
- How can the UK ensure that critical
services that currently rely on a reliable fuel supply chain
(from hospitals generators, to freight logistics, to food supply)
can transition to low carbon alternatives without any
disruption.
- What does the Government need to do
to ensure that the transition from oil and gas does not simply
de-industrialise areas and damage the communities that currently
benefit from the fossil fuel industry?
- How should the UK manage a
declining domestic market in gas, including how the gas
infrastructure can be partially, or completely, decommissioned
without putting the burden on a shrinking number of
consumers?
- What should the Government be doing
to ensure the supply chains for the oil and gas sector are
sustained as North Sea outputs decline and they transition to
supporting the renewables sector?
