Bill before Westminster would end new North Sea oil licences

The Energy Independence Bill, laid before Westminster, would strip the North Sea Transition Authority of its power to grant new oil and gas licences, outlawing fresh exploration in the basin and formalising a pledge made in Labour’s 2024 manifesto. Ministers framed the change as both a fulfilment of that commitment and a means of underpinning the government’s stated goal of reducing global warming.

The legislation does not, however, settle the most consequential regulatory decision still pending. The fate of Rosebank, off Shetland and the UK’s largest known untapped field, remains unresolved. The project was approved in 2022 by the previous Conservative government, then subjected to legal challenges from environmental groups, leaving Labour ministers to decide whether to allow it to proceed. The bill will not affect that decision.

Meanwhile, the proposal arrives two weeks after the government approved production from the Jackdaw gas field off the coast of Aberdeen, another project originally approved under the Conservatives and contested through the courts. Ministers said Jackdaw would help heat millions of homes; campaigners countered that the approval would hamper efforts to tackle climate change and make no meaningful difference to UK energy security.

Accountability for those calls now sits squarely with the current administration. Scotland’s First Minister, John Swinney, has declined to state a definitive position on Rosebank. Pressed repeatedly at Holyrood last month, he told MSPs that the carbon emissions from developing an individual site must be assessed for compatibility with the journey to net zero, describing that as the legal obligation and the test the UK government must go through.

Beyond the licensing ban, the wide-ranging bill would introduce Transitional Energy Certificates, allowing existing fields to deliver additional production from areas bordering or in close proximity to already licensed fields, or from areas already part of an existing field. The government estimated this could yield about 60 million barrels of oil and support hundreds of jobs, and vowed to sustain growth and investment across North Sea communities as the sector transitions.

The bill also reaches into consumer regulation. It would formally scrap gas standing charges and introduce reforms intended to speed up grid connections. Separately, the government announced an energy wealth fund, financed by tax revenue from oil and gas extraction and seeded with an initial £2bn, to invest in renewable and low carbon energy projects.

Prime Minister Andy Burnham said the changes together would bring bills down for good, give families greater security and put Britain back in control of its energy future. Energy Secretary Miatta Fahnbulleh said the bill would help build a clean energy future which people feel in their pockets, households and communities, ensuring support reaches those who need it most.

The opposition has been scathing. Shadow Energy Secretary Andrew Bowie, the Conservative MP for West Aberdeenshire and Kincardine, called Labour ministers utterly delusional and accused them of being totally oblivious to the economic and energy threats the country faces. He added that the government might as well hang a closed for business sign over Aberdeen and the North Sea. The Conservatives broadly described the bills as dangerous.

Industry bodies pushed back on the exploration ban while endorsing parts of the agenda. David Whitehouse, chief executive of Offshore Energies UK, said the government was right to target energy affordability but should also prioritise energy security, noting that Britain imports more than 40% of the energy it needs, leaving households and businesses exposed in an increasingly volatile world. Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, argued it made no sense to wind down North Sea production, saying Britain will need oil and gas for decades and the choice is between producing more at home, supporting British jobs and investment, or paying other countries to produce it.

By contrast, environmental groups welcomed the bill while pressing the government further on Rosebank. Greenpeace UK called it a positive step forward for the clean energy transition, but urged ministers to reject the field. Amy McCarthy, the group’s head of politics, said saying a resounding no to the project, which she argued would annihilate every single climate or cost-of-living benefit achieved through the bill, must be step one to securing power and protecting lives.

Rosebank, situated 80 miles north-west of Shetland, is thought to contain between 300 million and 500 million barrels of oil. Backers describe it as a vital lifeline for the energy industry in the north east of Scotland and a boost to security at a time when global supply chains are disrupted by conflict. Opponents say it would accelerate the climate crisis, slow the transition to greener sources and do little for energy security, since its output would largely be exported overseas to be refined.

The bill’s passage through Westminster will now determine whether the licensing ban becomes law, while the Rosebank decision remains the clearest test of how the government weighs its climate commitments against energy and economic pressures, and whether ministers can hold together a coalition of industry, campaigners and consumers along the way.