US President-elect Donald Trump has sharply criticised the UK’s energy policy, particularly the government’s move away from oil and gas production in the North Sea. In a recent post on his Truth Social platform, Trump described the UK’s decision as a “very big mistake” and called for the government to “open up” the North Sea and “get rid of windmills”.
Trump’s remarks come in response to recent developments surrounding the UK’s oil and gas sector, specifically in the wake of Labour’s proposal to increase taxes on North Sea producers. In October, the UK Government announced it would raise the windfall tax on companies drilling in the North Sea from 35% to 38%. The Labour Party plans to use the revenue from this tax hike to fund renewable energy projects, bolstering its commitment to a greener future.
In his social media post, Trump linked to an article about the tax changes, expressing his disapproval of the UK’s energy strategy. “The U.K. is making a very big mistake,” Trump wrote. “Open up the North Sea. Get rid of windmills!”
The President-elect’s comments were made in response to US oil firm Apache’s November announcement that it would be withdrawing from the North Sea due to the rising windfall tax. Apache’s exit has been viewed by some as a signal of the challenges facing the UK’s oil and gas industry in light of increasing taxation and declining production.
The decline of north sea oil and gas production
Oil companies have been gradually withdrawing from the North Sea for decades. While production in the region peaked at 4.5 million barrels of oil equivalent per day in 1999, output has dwindled to approximately 1.3 million barrels per day today. The decline in production is largely due to the region’s slowly depleting oil fields, which are becoming less profitable for companies operating there.
Despite this, the UK Government has committed to transitioning away from fossil fuels and achieving net-zero emissions by 2050. One key aspect of this transition is the goal to decarbonise the power system by 2030, which involves reducing reliance on gas-fired power plants and increasing the use of renewable energy sources, particularly offshore wind. The government’s plan aims to quadruple offshore wind energy generation over the next five years, positioning wind energy as a cornerstone of the UK’s future energy strategy.
In contrast, Trump has promised to boost oil and gas production upon his return to the White House, advocating for increased exploration and extraction in the US and internationally. This approach aligns with his previous policies, which supported the expansion of fossil fuel production in the United States.
The future of the north sea oil industry
The North Sea oil industry has already seen a number of significant exits from major players. In November, Apache, a Texas-based company, confirmed that it would cease all production at its UK assets by December 2029—earlier than originally planned. This decision follows ExxonMobil’s withdrawal from the region in July 2022, marking another blow to the UK’s oil industry.
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Meanwhile, Shell and Equinor announced plans to combine their offshore oil and gas assets in the North Sea into a new company, a move that Zoe Yujnovich, Shell’s Director of Integrated Gas and Upstream, explained was partly due to the region’s declining profitability. “The North Sea is no longer the prolific basin that it once was,” she said.
A UK Government spokesperson responded to Trump’s criticism, reiterating the government’s focus on ensuring a fair and orderly transition in the North Sea. “Our priority is a fair, orderly and prosperous transition in the North Sea in line with our climate and legal obligations,” the spokesperson said. “We need to replace our dependency on unstable fossil fuel markets with clean, homegrown power controlled in Britain – which is the best way to protect billpayers and boost our energy independence.”
The road ahead
As the UK pushes forward with its green energy agenda, the future of the North Sea oil and gas industry remains uncertain. While the government aims to transition to renewable energy, industry experts warn that significant challenges lie ahead in maintaining energy security and managing the economic impact of reducing reliance on fossil fuels.
The UK’s energy policy, including its stance on North Sea oil and gas, will continue to be a contentious issue, with strong opinions on both sides. As Trump’s comments highlight, there is a clear divide between those who advocate for continued investment in fossil fuels and those pushing for a greener, more sustainable energy future.
