New research published today by the Stockholm Environment Institute (SEI) and Climate Strategies shines a spotlight on the action needed to reduce oil and gas extraction, and emphasises that governments must take a leading role in phasing out oil and gas. This research comes as UK Prime Minister Rishi Sunak announces at least 100 new oil and gas licenses.
While the Paris Agreement has galvanized efforts to limit global warming by reducing the use
and consumption of fossil fuels, international efforts on a similar scale to reduce fossil fuel
supply have not emerged. Countries are set to produce twice as much fossil fuels by 2030 than
consistent with limiting global warming to 1.5C (SEI et al., 2021). The current logic of international
climate policy – which is to address climate change mainly through demand-side efforts – is
being questioned by academia (Asheim et al., 2019; Gaulin & Le Billon, 2020; Green & Denniss,
2018; Lazarus & van Asselt, 2018; Sanchez & Linde, 2023). In recent years several initiatives led
by government and civil society have emerged that seek to push the issue of reducing fossil fuel
supply higher up on the international climate agenda (Linde et al., 2022).
The Oil and Gas Transitions research project, co-led by Climate Strategies and the Stockholm
Environment Institute (SEI), aims to improve understanding of how countries that produce
oil and gas can move away from fossil fuel production towards pathways compatible with
global climate goals and a just transition. The project adopts Atteridge and Strambo’s (2020a)
broad framing of a just transition, which goes beyond only supporting workers affected by
transition to also consider local, national and international equity issues and broader negative
consequences associated with structural change. While the questions analysed in the project
are globally relevant, it focuses on three countries producing oil and gas from the North Sea
basin: Denmark, Norway and the UK.
The North Sea as an oil and gas region has a shared geography, history of production, and
operating conditions. The discovery of large resources in the North Sea in the late 1960s and
early 1970s meant that North Sea oil output began to ramp up at a crucial juncture of new
realities brought on by the oil crises of the 1970s. The strong increase in North Sea oil production
in the 1980s contributed to a diversification of the global oil market, away from an earlier
substantial dependence on OPEC producers (Yergin, 2009). The now mature production region
is characterized by high capital investments, technologically complex projects and challenging
offshore conditions for exploration and extraction (Adegbamigbe et al., 2022).
The case of the North Sea is pertinent for an equitable phase out of oil and gas, both globally and
domestically. At the global level, it can be argued that North Sea producers ought to phase out
soonest, since they are most capable of bearing the burden of the transition owing to the countries’
wealth and provision of social safety nets (Kartha et al., 2018; Muttitt & Kartha, 2020). This also
means that North Sea producers are well placed to take international leadership on reducing
fossil fuel supply. At the domestic level, the history of socio-technical transitions demonstrates
that without active management, the outcomes of a transition can be detrimental for local and
marginalized communities (Atteridge & Strambo, 2020c). Given that the North Sea is a mature
region of production where countries have ambitious carbon neutrality targets, these producers
should already be putting in place transition strategies to ensure that no one is left behind.
This final synthesis report of the Oil and Gas Transitions project presents insights gained from
co-production workshops on transition scenarios, held with stakeholders from government,
industry and civil society in Denmark, Norway, and the UK. The report also brings together
insights from all parts of the project, and sets out policy considerations and insights focusing on
supply side interventions when pursuing just transitions from oil and gas in the North Sea. Finally,
it highlights considerations that are relevant to producer countries in other regions of the world
seeking to embark on similar transitions.
The report is structured as follows. Section 2 synthesizes the outputs of the scenario workshops.
Section 3 discusses lessons learned from the North Sea case studies. Section 4 presents
reflections on the implications of this project for oil and gas transitions in other regions of the
world. Section 5 concludes the report.