“The livelihoods of 200,000 people depend on the sector,” says OEUK

As the country prepares for a general election and the launch of manifestos, Offshore Energies UK (OEUK) has highlighted the importance of supporting “over 200,000 people whose livelihoods depend on the sector” in its latest report.

Labor, the party expected to win the July 4 general election, pledged last week to honor its commitment of no new oil and gas concessions.

However, the trade body is fighting against parts of the country’s hydrocarbon industry.

OEUK’s ‘Economics and People’ report states: ‘The sector generates around 1% of the value of the UK economy and provides 1 in 160 jobs.

“This contribution is much higher in some parts of the UK. In Scotland, for example, it is estimated that the industry provides around 1 in 30 jobs.”

Furthermore, OEUK noted that “stakeholders need to understand the impact that policies can have” when they go to the polls.

The trade body wrote: “For the marine energy sector, the right policies can unlock opportunities to create economic growth and new jobs.

“It is equally helpful for people in the industry to be able to confidently express what the sector offers and how their work is important to maintaining and developing it.”

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Ahead of the report’s publication, author and market intelligence manager at OEUK Ross Dornan highlighted how far the UK is from the policies needed to deliver the energy transition in its own market.

He explained that the party’s programs include elements to which OEUK “adapts”, namely economic growth, emission reduction and increased energy supplies. However, there are also policies that stand in the way of achieving the OEUK goals.

“There are parts that we think are challenging; we want continued access to licenses, we want to continue to work on the fiscal system to make sure that we have a competitive and stable fiscal position that allows us to compete internationally, and we will continue to engage very positively in these areas,” Dornan said.

He explained that the industry organization also wants to continue work on offshore wind energy, carbon capture and storage, and hydrogen.

“We will continue to engage constructively with all parties who want to see similar results and who want to see the benefits of the country’s energy transition become a reality.”

Supporting policy necessary for the “national energy transformation”

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OEUK says job opportunities in the offshore energy sector could increase by 50% by 2030 if the right policies are in place. But OEUK CEO David Whitehouse doesn’t see that support.

“I am deeply concerned about Labor’s proposals to scrap new oil and gas concessions,” he wrote on LinkedIn as the party unveiled the proposed rules.

“The bulk of the £1.4 trillion needed to achieve net zero in the UK must come from private companies,” he continued after Labour’s backing of the proposed state-owned energy company.

Whitehouse argued that the industry needed a “predictable fiscal regime” to sustain investment.

He explained that in the “global race for energy investment”, the Energy Profits Tax (EPL) and signaling around energy companies are deterring the financing needed by the sector.

OEUK is working with Labor on skills transferability

OEUK focused on jobs and skills related to the energy transition as part of its work on a “skills passport” for workers wanting to work in traditional and renewable industries.

It follows news earlier this month that the Labor government would create an offshore skills passport to enable workers to move between fossil fuels and renewable energy sources.

“Our report shows the offshore industry could invest £450 billion in UK energy by 2040,” Whitehouse said.

The head of the industry body argued that the “path to success” was a home-grown energy transition that leveraged skills gained from the UK’s energy heritage.

He continued: “Through support policies, the industry can deliver sustainable economic value, increase the efficiency of our supply chain, sustain high-skilled jobs and ensure energy security, all while meeting our climate goals.

“We are committed to ensuring that the new government recognizes the importance of the role our industry plays in the UK’s economic future and the contribution of the more than 200,000 people whose livelihoods depend on this sector.”

OEUK external relations director Jenny Stanning has previously said she believed skills would play a key role in how the campaign ran soon after the election was called.

Ms Stanning told Energy Voice: “I think we will hear a big focus on people and jobs and I think all sides are absolutely right, I expected them to be talking about it.”

OEUK to EPL

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As well as skills and future oil and gas licences, the sector is campaigning against fiscal policies that have been driving investment out of the UK in recent years.

In the Labor Party’s recent manifesto, it pledged to “plug the loopholes” in windfall profits tax on oil and gas companies by raising £1.2 billion to fund its Green Prosperity Plan alongside government borrowing.

Since its introduction by then-Chancellor Rishi Sunak in 2022, the EPL has raised the basic tax rate on UK operators to 75%, and under the opposition’s plan this is set to rise to 78%.

Labor’s plan is to extend the EPP’s sunset clause until the end of the next parliament and remove “unjustified generous” investment allowances.

The current government has also tinkered with fiscal policy in recent months, with Chancellor Jeremy Hunt announcing a one-year extension of the regime in his spring budget.

OEUK described the Tory government’s move at the time as a “disappointing blow” that makes investment planning “impossible”.