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No credible forecast shows UK oil
and gas demand falling to zero by 2050, even under
net zero scenarios – oil and gas are essential ingredients in
plastics, fertilisers, medicines and modern
technology
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The 78% headline tax rate
is forcing a decline in North Sea production
and driving investment overseas, with the workforce
forecast to halve to as low as 57,000 by the early 2030s –
losing up to 1,000 jobs a month
A new discussion paper published today
by the Institute of Economic Affairs dismantles the case for
ending UK oil and gas production, warning it would damage the
economy, increase global emissions and threaten
Britain's energy security.
The paper, Just Stop Oil?, by energy expert Kathryn Porter of
Watt-Logic, illustrates how oil and gas underpin modern
life far beyond their role as fuels – from hospital equipment and
medicines to fertilisers and electronics. Even the Climate Change
Committee still projects UK demand of 168 million barrels of oil
equivalent in 2050, around 40% of current
production.
Porter argues that forcing premature
decline in North Sea production does not cut global emissions –
it increases them. Imported oil and gas carries a carbon
footprint around 50% higher than domestic production, according
to the Climate Change
Committee.
The paper is particularly critical of
the windfall tax, which has raised the headline rate on North Sea
production to 78%. Rather than punishing the populist
targets of Shell and BP, it has devastated independent
producers. Harbour Energy paid four times more UK tax in 2022
than Shell despite revenues over sixty times smaller, saw its
profits collapse from $101 million to $8 million, and has since
cut over 700 UK jobs and shifted investment to Indonesia and
Mexico. Apache has announced it will end all North Sea operations
by 2029. Chevron is closing its Aberdeen office after 55
years.
Wood Mackenzie warns 2025 is set to
become the first year since 1960 without a single exploration
well in the North Sea. The workforce has already fallen from
120,000 to 115,000, with Robert Gordon University forecasting a
decline to as low as 57,000 by the early 2030s. 89% of
supply chain firms plan to increase non-UK business. In stark
contrast, Norway is investing $26 billion in its
continental shelf, making major new discoveries under a stable,
investment-friendly regime.
The paper warns that accelerated
decline also threatens energy security. As offshore pipeline
infrastructure loses throughput, it risks cascading closures that
strand viable fields. The National Energy System
Operator has warned that by 2030 there could be insufficient gas
to meet UK demand on cold days, with industry analysts
expecting the risk to emerge as early as winter
2026/27.
Kathryn Porter, founder of
Watt-Logic and author of 'Just Stop Oil?',
said:
"Oil and gas producers are not the
enemy – they produce goods used by all of us every day. The
windfall tax was supposed to target Shell and BP but instead it
has hammered independents, driven investment overseas
and vastly accelerated the decline of important
tax receipts. Unless we change course rapidly, Britain
will be increasingly reliant on dirtier, more expensive
imports – and less secure on cold winter days when we need energy
most."
, Director General of the
Institute of Economic Affairs, said:
"Many people imagine that campaigns
against oil and gas only target 'the industry' and not the rest
of us. But in a modern economy, energy supplies and energy costs
affect every sector of activity. Pushing up costs and
imagining that we can simply eliminate oil and gas in sectors in
which there is no satisfactory replacement risk bringing
disaster. It would be quite simply destructive and
counter-productive to 'just stop
oil'."
ENDS
IEA spokespeople are available for live and pre-recorded
broadcast
Contact: media@iea.org.uk /
07763 365520
Notes to Editors
- Read the full report 'Just Stop Oil? the economic and
environmental consequences of ending domestic oil and gas
production' here
