The UK's commitment to green energy policies, combined with high taxation and regulatory indecision regarding North Sea oil and gas fields, is making the country unattractive for investment, according to Jim Johnson, chief executive of engineering company Hunting.
Johnson highlighted the stalled Rosebank and Jackdaw oil and gas fields in the North Sea as examples of valuable domestic energy sources being left undeveloped due to ministerial uncertainty. He noted that this situation exacerbates the UK's vulnerability to global energy market turmoil, pointing to a recent 4% increase in the energy price cap by regulator Ofgem, which raised the average annual bill to £1,723.
"The reason, we are told, is the ongoing conflict in Iran and the resulting turmoil in international energy markets," Johnson wrote. "And that may be true – but it does not tell the whole truth. For while the conflict has undoubtedly affected wholesale prices, the reality is that the war has exposed Britain’s vulnerability; it did not create it."
He attributes this vulnerability to policies enacted in Westminster, including a headline tax rate of 78% on North Sea oil and gas profits, a refusal to issue new exploration licenses, and regulatory delays for vital projects. This, he argues, leads to an increasing dependence on imported energy.
Johnson stated that Hunting has significantly reduced its UK presence, closing four of its six operating sites and shedding dozens of jobs, due to these policies. He explained that as a global business, investment decisions are made based on where capital is welcomed and respected, not patriotism. He recalled that in the 1990s, Aberdeen was a hub of ambition and invention for the oilfield services industry, a stark contrast to its current state, which he attributes to government policy.
Other companies are also altering their North Sea operations. Apache, a major customer of Hunting, suspended drilling in the North Sea in 2023, citing the burdensome tax regime, and later announced an end to its North Sea production altogether. BP has also put its entire UK North Sea oil and gas business up for sale, opting to develop a large offshore gas field in Venezuela.
Johnson criticized the prevailing focus on Net Zero as being akin to a "cult" or "religion," arguing that while energy companies are not indifferent to climate change and have invested in cleaner production, environmental goals must be balanced with improving living standards.
He pointed out that despite the push for green energy, Britain still relies heavily on fossil fuels, consuming roughly 70 billion cubic meters of gas and 60 million tonnes of oil annually. The decline in North Sea production means a larger proportion must be imported, sometimes from countries with lower environmental standards. Furthermore, transporting imported energy adds to costs and emissions.
Contrary to suggestions that the UK has run out of oil and gas, Johnson asserted that substantial potential reserves remain beneath UK waters, with technological advancements making previously inaccessible reserves extractable. He stressed that the transition to cleaner energy does not have to destroy the foundations of the economy, and that a modern industrial nation requires abundant, reliable, and competitively priced energy.
"Ministers talk about rebuilding British industry, improving living standards and shielding households from volatile international markets. Yet their energy policies work against every one of those goals," Johnson concluded.