A committee of MPs has called for a pragmatic approach to North Sea licensing policy and clarification on how developers may be allowed to drill under existing exploration licences.
The call by the Scottish Affairs Committee is likely to get a sympathetic hearing from the Labour government at Westminster which is indicating a softening of its targets on fossil fuels.
In a new report the committee welcomed new guidance on assessing the environmental impact of new developments, such as Rosebank, and recommends that the government issues an explanatory statement following each assessment.
Norwegian energy giant Equinor published an assessment last week following an earlier court ruling that said the correct procedure had not been followed.
The committee of MPs also say reform of the windfall tax, introduced in 2022, is crucial to avoid accelerating the decline of jobs in the North Sea oil and gas industry. It confirms previous findings that job losses in oil and gas currently outstrip jobs created in the clean energy industry.
The MPs say that until clean energy jobs can be created at the scale needed to match current job losses, the UK government should put the brake on measures that lead to further erosion of the oil and gas labour force.
Notably, they want reform of the Energy Profits Levy, also known as the Windfall Tax, to be implemented as soon as possible to create certainty for the industry. The UK government has indicated that it is considering a replacement tax.
The report concludes that the UK and Scottish Governments should have acted sooner to prepare for resulting job losses at Grangemouth oil refinery and set in motion plans for the site’s future much earlier.
This lack of action created an avoidable employment gap and trauma for the local community, it says.
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “This report is a much-needed dose of reality and validates what industry and communities in the North-east have been saying for years.
“The UK Government now faces a clear choice – it can manage our substantial remaining North Sea reserves in a way that protects jobs, skills and energy security, or it can let this national asset collapse faster than the industries that are meant to replace it. One is a transition, the other is a cliff edge.
“Cutting domestic production only increases reliance on imported LNG with four times the carbon footprint.
“The government must therefore act now to remove the Energy Profits Levy and back a managed transition that keeps investment, tax revenue and talent here in the UK.”
SNP energy spokesperson Graham Leadbitter MP said: “The Labour Government in Westminster is destroying jobs in Scotland’s offshore industry with its fiscal and licensing regime and this report is yet another in the mounting pile of evidence that Ed Miliband must change course.”
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