Eye-watering global oil price rises, driven by the war in the Middle East, are putting the UK on course for further inflation and stagnant growth. For months, there have been calls for the UK to abandon its investment in renewables and “max out” North Sea oil production, but that would be the worst possible course of action, writes Herald columnist Rebecca McQuillan.

This crisis shows once again why we need to reduce our dependence on fossil fuels. Here we are again, experiencing our second oil price shock in six years, with oil topping $100 a barrel and reaching its highest level since 2022. Here we are again, quite probably heading for a cost-of-living spike. Here we are again, watching the government’s plans for funding public services and investing in future prosperity undermined before our eyes.

If only there were a way to insulate ourselves against all this, something we could do to prevent ourselves being so badly affected by fluctuations in the global oil price. Moving away from our dependence on oil and gas, which are subject to high and sometimes extreme price volatility, is one of the key arguments for net zero policies like investing in renewables and changing the way we fuel our cars and heat our homes.

Increasing the proportion of our energy needs that are met from renewables reduces the impact of those price fluctuations. Renewable power from wind and solar is cheap to generate, variable but predictable (through weather forecasting), and less vulnerable to physical attack than power from conventional plants. The more we can produce to cover our needs, the more we can insulate ourselves from global energy price shocks and, crucially, from the inflationary pressures they create.

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But listen to some and the answer, they say, is the opposite: drill, baby, drill. According to this argument, we need to max out remaining oil production in the much-depleted North Sea basin to make us less reliant on overseas imports and give us “security of supply”. It’s implied that if we produced more oil from the North Sea, we would pay less. This argument is used as a blunt hammer to bash government policies designed to wean the economy off fossil fuels.

But it’s not actually true that we’d pay less, is it? Almost all oil produced in the UK is exported, not sold at home, and the price of oil from the North Sea is linked to fluctuations in the global oil price. Is the industry suggesting that it would start selling oil exclusively to the UK market and lower prices to boot as an act of civic duty? Of course not. Increasing North Sea oil production could increase global supply and affect prices that way, but North Sea production is so small that the effect would be negligible. It’s also becoming more expensive and the UK taxpayer covers much of the cost. This is clearly not a serious strategy for lowering our prices and stabilising the economy.

As for gas, we have hardly any of it left. Our dependence on imports is due to rise dramatically and would even if new gas fields were approved. Gas too is sold to on an international market, so more UK production would have little impact on prices.

What about energy security though? Reform make the extraordinary claim that the UK could become self-sufficient in oil and gas and should abandon the drive to net zero. It has also claimed that tens of thousands of job losses in the industry are down to net zero policies.

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This is thoroughly misleading. Self-sufficient? There isn’t the gas to extract. Saying we should turn our backs on renewables and focus on emptying already-depleted North Sea oil and gas fields, is like saying we need to feed the nation on a few warehouses-full of rice while ignoring our almost limitless capacity to grow potatoes. It would be a historic mistake.

Shale oil and gas, is that supposed to be the answer? Fracking is deeply unpopular with the public, comes with high production costs, environmental impacts and would, again, do nothing to lower bills. Why on earth would we go down that route when we can create lots more cheap, clean power, not to mention jobs in the green industries? The issue of jobs connected to the North Sea oil industry has been weaponised by right-wing interests, but again much of the what’s said is untrue. The North Sea is in terminal decline and that’s why the number of jobs supported by the industry has dropped by more than half in 25 years.

That hasn’t taken place in a hostile policy environment – quite the reverse. It’s happened in spite of successive governments offering generous tax regimes and incentives. You can understand from the industry’s point of view that it’s frustrating to have a government that is no longer unquestioningly pro Big Oil and wants it to pivot to new forms of energy production (which it is strongly resisting). Naturally oil companies just want to drill oil. Of course they don’t like the windfall tax, but made huge profits the last time the oil price spiked and will again if the current shock continues, with consumers paying the price.

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The oil companies will be just fine but workers are another matter. It’s a hugely anxious time for the people of north-east Scotland, who are desperately worried about their livelihoods. The renewables industry so far hasn’t produced jobs in the north-east fast enough to prevent all highly skilled workers in the area who have lost their jobs in oil and gas from having to leave. The Scottish affairs committee last year made the case that the UK and Scottish governments have to manage the transition from one industry to another at a pace that’s realistic and explain how they’re doing it, which is entirely justified. Hopeful statements are nowhere near enough when jobs are leaching away.

But abandoning the energy transition and throwing our lot in instead with an industry that’s increasingly uneconomic and in terminal decline, as some politicians would have us do, would certainly not be looking after the interests of Aberdonians. The UK and wider world will continue to need oil and gas for some time to come, but demand is already dropping dramatically (gas demand in the UK has fallen by two fifths since 2010). It will drop further. That won’t just help reach climate targets but reduce the UK’s exposure to high fuel costs.

Keir Starmer addressed the energy price issue in the context of the Middle East conflict yesterday, saying: “The longer this goes on, the more likely the potential for an impact on our economy, impact into the lives and households of everybody and every business.” You don’t say.

How often do we have to go through this before the naysayers accept that over-reliance on fossil fuels is actually bad for the economy?

Rebecca McQuillan is a journalist specialising in politics and Scottish affairs. She can be found on Bluesky at @becmcq.bsky.social and on X at @BecMcQ

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