Pragmatism or transition? Andy Burnham’s energy balancing act and the future of the UK North Sea

The Burnham government’s energy dilemma

The new government’s challenge is unprecedented. Britain is simultaneously trying to decarbonise its economy, maintain secure energy supplies, attract industrial investment and protect skilled jobs concentrated in regions such as Aberdeen, Teesside, Humberside and the north-east of England. For much of the past decade, UK energy policy has been framed around achieving net-zero emissions by 2050. However, global events, including volatile gas prices, geopolitical instability and concerns about industrial competitiveness, have reintroduced energy security as a central policy objective. Andy Burnham has acknowledged this reality. Shortly after entering Downing Street, he stated that his government would take a “pragmatic approach” to North Sea oil and gas, recognising that Britain continues to need domestic energy resources while households and industry face ongoing cost pressures. This represents a subtle but important shift. Rather than presenting oil and gas as industries in managed decline, Burnham appears to be positioning them as part of a broader energy mix that will coexist alongside rapidly expanding low-carbon technologies for decades to come.

Offshore oil and gas: continuing role or managed decline?

The most immediate test of this approach concerns the Rosebank and Jackdaw developments. Rosebank, west of Shetland, remains the UK’s largest undeveloped oil field, while Jackdaw, east of Aberdeen, contains significant natural gas reserves and could supply a meaningful proportion of domestic gas demand. Both projects received approvals under previous governments before court rulings required renewed environmental assessments. Final decisions are expected during Burnham’s premiership. Industry groups argue that approving these developments would support thousands of jobs, sustain offshore supply chains and reduce dependence on imported hydrocarbons. Offshore Energies UK has consistently argued that Britain will continue to need oil and gas for decades and therefore should maximise domestic production where possible. Supporters also point out that importing liquefied natural gas from overseas often results in higher lifecycle emissions than utilising domestically produced North Sea gas. Critics, however, argue that new production does little to reduce consumer energy prices because oil and gas are traded in global markets. They contend that extending hydrocarbon production risks delaying investment in cleaner technologies while offering only marginal gains in energy security.

Alternatives to hydrocarbons

The Burnham government’s long-term strategy remains firmly rooted in diversifying Britain’s energy supply:

• Offshore wind: offshore wind remains the cornerstone of UK energy policy. Britain possesses some of the best wind resources in Europe and already operates one of the world’s largest offshore wind sectors. Major leasing programmes such as ScotWind are expected to attract tens of billions of pounds of investment, potentially supporting tens of thousands of jobs across manufacturing, construction, marine operations and maintenance sectors.
• Hydrogen: Hydrogen is increasingly viewed as an important future fuel, particularly for industries that are difficult to electrify, such as steelmaking, chemicals and heavy transport. The government continues to support both green hydrogen, produced using renewable electricity, and blue hydrogen, which incorporates carbon capture technologies.
• Carbon capture and storage: carbon capture and storage has become central to maintaining industrial competitiveness while reducing emissions. Existing offshore expertise, pipelines and geological formations beneath the North Sea could provide significant advantages for UK CCS deployment.
• Nuclear power: although less politically prominent than wind energy, nuclear power remains an important component of Britain’s future electricity system due to its ability to provide reliable baseload generation independent of weather conditions.

Renewable subsidies and public support

A fundamental question concerns the extent to which renewable energy should continue receiving government support.

The Burnham government remains committed to mechanisms that encourage private investment in renewable projects. Such policies have historically included Contracts for Difference, which provide developers with revenue certainty and help attract investment into large-scale energy infrastructure. Supporters argue these schemes have successfully reduced offshore wind costs and accelerated deployment.

Critics, particularly within Reform UK, argue that renewable subsidies distort markets and ultimately increase costs for consumers and industry. Reform figures have expressed concerns that excessive emphasis on subsidised renewable energy is undermining Britain’s industrial competitiveness. The government’s position appears to be that strategic support remains necessary until sufficient scale, infrastructure and market maturity have been achieved.

Solving the storage challenge

The greatest challenge facing a renewable-dominated electricity system is intermittency. Wind generation fluctuates according to weather conditions, meaning large amounts of energy storage and grid flexibility will be required. Government plans therefore include:

• Grid-scale battery storage
• New pumped-storage hydroelectric projects
• Hydrogen-based energy storage
• Major transmission network upgrades
• Enhanced smart-grid technologies

These measures are intended to ensure reliable electricity supplies even during periods of low renewable generation. Industry groups widely regard storage expansion as essential to achieving long-term energy security.

Conservative counterarguments

The Conservative Party under Kemi Badenoch argues that the government is placing excessive emphasis on transition while underestimating the strategic value of domestic hydrocarbons. Conservatives advocate expanded North Sea development and have called for restrictions on new oil and gas licensing to be reversed. Their central argument is that Britain should prioritise producing energy domestically wherever possible rather than relying increasingly upon imports. The Conservative position frames energy security as a national resilience issue as much as an environmental question. Party figures argue that geopolitical shocks have demonstrated the risks associated with dependence upon overseas energy supplies. Critics respond that domestic production alone cannot shield consumers from global energy prices and note that North Sea output has been declining for decades as resources mature.

Reform UK’s challenge

Reform UK goes further. The party advocates significantly increased domestic oil and gas production, reduced emphasis on renewable subsidies and a broader reassessment of Britain’s net-zero strategy. Reform argues that affordable energy is essential for economic growth and industrial competitiveness. Supporters of Reform’s position argue that Britain risks deindustrialisation if energy costs remain higher than those faced by international competitors. They contend that restricting domestic production merely shifts dependence towards imports while sacrificing jobs and investment opportunities. Opponents counter that long-term competitiveness will depend on developing new industries rather than attempting to preserve declining hydrocarbon resources indefinitely.

Jobs, skills and manufacturing opportunities

Perhaps the most important question is what all this means for employment. The UK offshore energy sector has created generations of highly skilled engineers, surveyors, marine professionals, geoscientists, subsea specialists and project managers. Many of these skills are directly transferable between oil and gas, offshore wind, subsea power transmission, hydrogen infrastructure and carbon capture projects. The government’s North Sea transition policies include workforce support programmes intended to facilitate movement between sectors and preserve valuable industrial capability.

For communities such as Aberdeen, this transition presents both risks and opportunities.

Potential risks

• Reduced oil and gas investment
• Supply-chain contraction
• Loss of specialist hydrocarbon expertise
• Regional economic disruption if replacement projects arrive too slowly

Potential opportunities

• Offshore wind manufacturing
• Cable installation and maintenance
• Carbon capture infrastructure
• Hydrogen production facilities
• Grid expansion projects
• Battery and energy-storage manufacturing
• Export of offshore engineering expertise

The long-term prize could be significant. If Britain successfully develops domestic manufacturing capability in wind turbines, foundations, subsea cables, hydrogen equipment and storage technologies, the energy transition could create a new industrial economy based upon many of the same engineering skills that built the North Sea energy industry.

Conclusion

Andy Burnham’s government has inherited one of the most complex energy policy challenges in modern British history. Rather than abandoning hydrocarbons or fully embracing new drilling, it appears to be pursuing a middle path that combines support for selected oil and gas developments with accelerated investment in offshore wind, hydrogen, carbon capture and energy storage. The central debate is no longer whether Britain should transition its energy system, but how rapidly that transition should occur and what role domestic hydrocarbons should play along the way. Conservatives and Reform UK favour a more robust commitment to North Sea production, while government ministers remain focused on building a future low-carbon energy economy. Success will ultimately depend upon whether the transition can secure energy supplies, maintain public support, preserve highly skilled employment and create new manufacturing industries capable of sustaining prosperity long after North Sea oil and gas production has peaked. In that respect, the future of the UK’s energy system is also the future of its industrial strategy, regional development and economic resilience.