Why drilling the North Sea won’t fix our energy bills — and what might

By Julian Briggs

The argument sounds like common sense. Britain has oil and gas under the North Sea. We’re paying a fortune to heat our homes. So why not drill more of it and bring our bills down?

It’s the kind of logic that’s hard to argue with over a pint. And over the past few months, with conflict in the Middle East sending energy prices lurching again, you’ll have heard it from politicians of every stripe — and quite a few newspaper columnists too.

But a team of researchers at Oxford University has now done the maths, and the answer, bluntly, is that it won’t work. Or at least, not in the way we’ve been promised.

The reason comes down to how energy markets actually work. Oil and gas aren’t priced according to where they come from — they’re sold on international markets, where the price is set by global supply and demand. The Climate Change Committee has previously advised ministers that even a substantial increase in UK extraction would be unlikely to shift the prices faced by consumers by more than a marginal amount, because the UK market is highly connected to global supply and pricing.  In other words, our gas bills aren’t high because we don’t drill enough. They’re high because the world’s gas price is high — and pumping a bit more out of the seabed off Aberdeen won’t change that.

There’s another inconvenient fact that often gets buried in these debates. Experts describe the North Sea as a “mature basin” — meaning most of the oil and gas it once contained has already been extracted. Around 90% of its reserves are already depleted, with output in long-term decline. The North Sea has been one of the most productive energy assets any country has ever had. We should be proud of that. But it’s running low, and no amount of political will changes the geology.

New North Sea licences issued by the previous government, over their entire lifetime, are projected to supply enough gas for the UK for roughly six months, with current output equivalent to about 36 days of extra supply. That’s not energy independence. That’s a sticking plaster.

None of this means the people working in the North Sea don’t matter — they absolutely do. These are skilled workers, many of them from communities not unlike Sheffield’s, who have spent decades in a hard and demanding industry keeping the country’s lights on. The number of jobs in the oil and gas industry fell by 70,000 during the years of the last government, largely without the public outcry it deserved. Any honest conversation about energy policy has to include a genuine commitment to those workers and the communities that depend on them.

But the question isn’t whether we value those people — of course we do. The question is whether doubling down on a depleting resource is really the best way to protect their futures, or ours.

The Oxford researchers make the case that the better path is already well within reach. A faster transition away from gas-powered electricity could cut household energy bills by three times as much as maximising North Sea oil and gas, with recurring annual savings rather than a one-off reduction. And unlike oil and gas, wind and solar don’t run out. Once the infrastructure is built, the fuel is free.

Sheffield knows something about industrial transition. This city was built on steel, lost most of it, and has been finding its feet ever since. That history gives us a sharper eye than most for the difference between a genuine plan and a politician’s promise. The North Sea isn’t going to save us from high energy bills — the maths simply doesn’t add up. What might actually help is investing seriously in the industries and infrastructure that make us less dependent on the whims of global commodity markets in the first place.

As researchers at Oxford put it, staying the course on clean energy would not only result in recurring annual reductions in household energy bills but would render the UK truly energy secure for generations to come. That’s not a green fantasy. It’s a practical argument about self-sufficiency — the kind of thing this city has always understood.

The next time someone tells you that drilling the North Sea is the answer to your heating bill, ask them to show their working. Because the people who’ve actually done the sums say it isn’t.

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This article draws on research published by the Oxford Smith School of Enterprise and the Environment, the UK Energy Research Centre, and Carbon Brief.