North Sea chiefs have claimed taxing the megaprofits of oil firms will hamper investment in the green energy transformation.
David Whitehouse, CEO of industry body Offshore Energies UK (OEUK), said he acknowledged public anger over fossil fuel firms raking in astronomical profits while Scots struggle with soaring fuel bills. But he defended the North Sea sector as a major contributor of tax revenues and jobs
Whitehouse spoke to the Record as OEUK today launches a manifesto calling for politicians to back a “homegrown” energy transition that accepts the need for oil and gas for decades to come. And he insisted the windfall tax should only stay in place while “windfall conditions” remain – warning it could discourage firms from investing in new energy schemes.
Read More
Related Articles
Read More
Related Articles
The world’s five biggest fossil fuel firms – including two headquartered in the UK, Shell and BP – have earned a staggering quarter of a TRILLION pounds since the war in Ukraine sent oil and gas prices skyrocketing.
Asked if he understood people’s anger over eye-watering oil industry profits, Whitehouse said: “The general public has been through an extremely difficult time with the cost of living crisis, I think we all need to acknowledge that.
“We’ve had exceptional circumstances coming out of Covid and with a war in Ukraine which did see an unprecedented spike in energy prices.
“I think it’s true that we all need to play our part.”
(Image: Jordan Pettitt/PA Wire)
But he added: “As a sector, we’ve always been very proud of the fact that we do pay taxes, that the work that we do generates economic value. It creates the taxes that can help pay for our important public services.
“But the point we would make is when the windfall conditions have gone, then surely it makes sense that the windfall tax goes – because the longer term prosperity is in continuing to attract investment in the wider energy sector.”
In its plea to parties ahead of this year’s general election, OEUK – formerly known as Oil and Gas UK – said the UK windfall tax should be scrapped no later than 2028 to ensure energy companies can invest in net zero.
Labour’s plan to increase the energy profits levy to pay for green investment and get rid of investment-linked loopholes has sparked fury the sector, which has claimed the move could decimate North Sea jobs.
But campaigners have long complained that investments in low-carbon schemes by oil giants are a tiny fraction of their profits – and dwarfed both by shareholder payouts and cash ploughed into new drilling projects.
Whitehouse insisted the energy transition “is happening” – and highlighted how the UK industry also included hundreds of smaller firms. He said they as well as the “major players” are all investing in clean power.
OEUK also supports Rishi Sunak’s controversial plan for annual oil and gas licensing rounds which has infuriated climate activists.
With the North Sea classed as a declining basin – and oil and gas extraction at a 50-year low – some experts have said the policy doesn’t make economic sense.
Lord Deben, former chair of the Climate Change Committee, has warned new North Sea projects are at risk of becoming “stranded assets”.
But Whitehouse said: “We are going to see a decline but we need to see that decline in a managed way. That’s why we need that continued investment.”
He pointed to the 200,000 UK jobs which depend on the sector and said even by 2050, 20 per cent of our energy demand will still come from oil and gas – down from current levels of 75 per cent.
OEUK’s manifesto also highlights the vital role skilled North Sea workers must play in the shift to clean energy technologies. It says an “Energy Skills Passport” to allow offshore workers to easily transfer to green sectors is essential.
It adds that if UK policymakers “get this right”, the energy industry could win £200billion in investment over the next decade – not just in oil and gas but also offshore wind, hydrogen and carbon capture.
To sign up to the Daily Record Politics newsletter, click here.
