Net zero not to blame on jobs

Net-zero policies are blamed for job losses in the offshore oil industry (as they are in the oil refinery industry). Is this fair?

Between 2015 and 2025 around 260,000 jobs related to offshore oil and gas were lost in the UK.

Direct employment in offshore oil and gas is in the tens of thousands. There is also related employment in supply chains and hospitality, for a total at the peak in 2014 of 453,000 jobs. The industry continues declining with exhaustion of reserves, or easy-to-extract reserves. Some companies look to diversify (e.g. to hydrogen production, renewables, carbon capture), but only seven out of 87 companies are investing in renewables.

The North Sea Transition Deal commits the upstream sector (exploration and production) to halving its production emissions and eliminating routine flaring by 2030. A recent judgement in the Supreme Court requires oil and gas companies to assess and mitigate downstream emissions as part of their Environmental Impact Assessments. The Labour government has largely remained committed to no new oil or gas exploration licenses. Industry bosses also blame the Energy Profits Levy (initially introduced as a windfall tax in 2022), which now taxes upstream profits by 78%, for driving away further investment in oil and gas. But the evidence is that jobs in and around North Sea oil and gas would decline regardless.

In 2014 oil prices fell to $50 a barrel. Between the start of the oil price drop and the end of 2016, over 120,000 jobs were lost; between 2016-2017, a further 40,000. The job losses resulted in increased workloads, to the extent that bosses boasted of productivity increasing by 42% per worker compared to 2014.

Between 2017 and the start of 2020 jobs in offshore oil remained relatively stable. Direct employment on oil rigs remained at 50,000. Then in the first year of the Covid pandemic roughly 35,000 jobs were lost, due to a fall in oil prices as demand fell.

Rebound

Following the pandemic there was a rebound for the industry which was helped along by Russia’s full-scale invasion of Ukraine, though blunted by another fall in prices. By 2023 related employment totalled 200,000 jobs.

Despite the oil-price increases due to the US-Israeli war on Iran and Iran closing the Strait of Hormuz in retaliation, the industry in the UK has continued to decline. On balance most job losses are down to bosses’ reactions to trends in the global oil and gas market. Net zero and windfall taxes hardly even register. There has been little serious state intervention to develop good alternative jobs, for example in and around renewables, but that indicates too little push for “net zero”, not too much.

You could argue the counter-factual that had governments cared more about ensuring the continuation of North Sea fossil-fuels and focussed less on net-zero, then fewer jobs would have been lost. But then also fewer people would be employed in the growing renewable energy sector and fewer people retrained and redeployed in renewables or in oil and gas decommissioning.

The Tory government handed out hundreds of oil and gas licenses in the months before losing office in July 2024. That did very little to counteract the decline in the industry: most of the licenses have been left inactive for commercial reasons.

Even if the government planned to undo its net-zero commitments, hand out yet more hundreds of new oil and gas licenses, and commit to more investment in the sector, the wider global trends in oil and gas would reduce jobs.

Transition

A transition in the UK is under way, but it is wrong to say, as the Unite union officialdom does, that net-zero targets and the current transition plans by the government are the main reason for job losses. Unite is effectively saying to workers: run into the arms of the same bosses that have cut hundreds of thousands of jobs and ask them to save you.

Instead of calling for “no ban without a plan”, Unite should seriously campaign for nationalisation of North Sea Oil and the wider energy industry in the UK, come up with its own serious plan for transition, and level its criticisms at a global fossil fuel industry that treats workers and the whole of humanity with contempt. This is the only reasonable and responsible way to mitigate job losses.

As heatwaves continue to smash records, the stakes are only getting higher. §

• 2023 worker-environmentalist transition plan: Our Power.