A stable energy policy framework could unlock the revenues Britain needs
This week, Westminster's Energy Security and Net Zero Committee came to Aberdeen to hear first-hand how the UK's energy transition is affecting businesses, workers and communities.
The evidence they heard was clear. The North Sea is not asking for special treatment. It is asking for a stable policy framework that allows Britain to make the most of one of its greatest strategic assets.
That conversation has become even more relevant following the Government's announcement of increased defence spending. Ministers now face difficult decisions over how to fund their ambitions, with reports suggesting a funding gap of around £15 billion still needs to be addressed.
The debate has inevitably turned to spending cuts, tax rises and difficult choices.
But there is another option.
Britain still relies on oil and gas for more than 70% of its energy needs. That is not going to change overnight. The real question is whether those resources are produced here, supporting British jobs and generating British tax revenues, or imported from overseas while domestic production is deliberately constrained.
Current policy is producing precisely that outcome. Investment has slowed, confidence has been undermined and skilled jobs continue to disappear from a sector that has underpinned the UK economy for more than half a century.
At the same time, demand for oil and gas remains.
The result is an increasingly uncomfortable contradiction. We are becoming more dependent on imports that often carry a higher carbon footprint while weakening the very industrial capability that will also be required to deliver offshore wind, carbon capture, hydrogen and the wider energy transition.
This is not an argument against net zero. It is an argument for delivering it in a way that protects jobs, investment and energy security. The Government has an opportunity to do exactly that.
Replacing the Energy Profits Levy with a permanent Oil and Gas Price Mechanism would restore the fiscal stability investors have been calling for. Alongside timely approval of projects such as Rosebank and Jackdaw, and continued support for responsible new drilling, it would send a clear signal that Britain remains open for energy investment.
The prize is significant. Analysis by Offshore Energies UK suggests that reforming the current windfall tax next year would generate an additional £15.7 billion in tax revenues over the coming decade by unlocking investment and sustaining domestic production.
That figure is striking because it closely mirrors the funding challenge now confronting ministers as they seek to increase defence spending.
Instead of asking working people to pay more tax or departments to absorb further spending reductions, Government could unlock growth that generates the revenues needed to help fund national priorities.
This should not be seen simply as an energy debate. It is about economic resilience. It is about industrial strategy. It is about ensuring Britain retains the skills, supply chains and engineering capability that underpin both our energy security and our national security.
The North Sea has delivered for the UK for more than 50 years. It has generated hundreds of billions of pounds in economic value, supported hundreds of thousands of jobs and provided the tax revenues that have funded public services across the country.
It can continue to do so.
Aberdeen is not asking Government to slow the energy transition. We are asking it to manage it properly. That means recognising that oil and gas will remain part of Britain's energy mix for decades to come and ensuring as much of that production as possible comes from our own waters rather than from imports.
The committee's visit to Aberdeen demonstrated the value of listening to the people and businesses living through this transition.
The message they heard was consistent: growth, energy security and net zero are not competing objectives. With the right policy framework, Britain can achieve all three.
The question is whether ministers are prepared to seize that opportunity.
Russell Borthwick is Chief Executive of the Aberdeen and Grampian Chamber of Commerce (AGCC)
