UKOilWatch Analysis — the new Energy Secretary's appointment, and the gap between announcing a transition and engineering one.
Miatta Fahnbulleh's appointment as Britain's new Energy Secretary is not an administrative detail.
It is the clearest indication yet that Andy Burnham's government intends to change the language surrounding North Sea oil and gas without fundamentally changing the direction of policy.
Fahnbulleh was appointed Secretary of State for Energy Security and Net Zero on 20 July 2026. Before entering Parliament in 2024 she spent six years as chief executive of the New Economics Foundation, and went on to serve as a junior energy minister at DESNZ. Her commitment to accelerating decarbonisation is neither hidden nor ambiguous.
In an essay published by Foreign Affairs at the end of 2019, she argued that the goal of a global Green New Deal should be net-zero carbon emissions within ten to fifteen years. In 2021, while Fahnbulleh was chief executive, the New Economics Foundation jointly published a report with Friends of the Earth calling for future licensing rounds to be cancelled, undeveloped licences to be revoked and financial support for fossil-fuel extraction to end.
Her appointment is therefore not the North Sea reset that some in the industry believed might follow Burnham's arrival in Downing Street.
It is continuity — with a little more room for manoeuvre around the edges.
The ban on new exploration licences remains. What may change is the government's willingness to permit limited development of already-discovered deposits close to existing fields through tiebacks and the new Transitional Energy Certificate system.
These certificates would allow acreage within or adjacent to existing fields to be developed without permitting new exploration. The government says they are intended to support the management of existing fields throughout their remaining lives and may bring known resources into production faster than conventional new licences.
That may preserve some existing infrastructure and bring smaller discoveries into production.
It is not a revival of North Sea exploration.
The appointment is not necessarily foolish. It is, however, revealing.
It tells us that the government continues to define energy security principally as an escape from fossil-fuel markets rather than as the preservation of sufficient domestic capacity until the replacement system is physically built.
That definition deserves much closer scrutiny.
The argument Fahnbulleh gets right
The strongest argument for the government's position should be conceded at the outset.
Britain cannot control the global price of oil. A new licensing round would not make Brent crude cheap, and additional North Sea fields would not insulate British households from an international gas-price shock.
Domestic oil is also not automatically British oil in any practical sense. Nearly 90% of the crude produced on the UK Continental Shelf was exported in 2024 — mainly to the Netherlands — principally because its quality does not always match the requirements of Britain's remaining refineries. The UK then imported lighter crude grades, particularly from the United States and Norway, better suited to those plants.
"British oil for British consumers" is therefore too simplistic.
Oil moves through an international system of refineries, traders, terminals, pipelines and shipping routes. Producing more crude in the North Sea would not make Britain physically self-sufficient.
Fahnbulleh is also right that an electricity system permanently dependent on gas remains exposed to international commodity prices.
She has repeatedly argued that Britain must break its dependence on volatile global fossil-fuel markets and that clean domestic power is the long-term route to energy security and lower bills.
The logic is not absurd.
Wind, solar and nuclear generation do not require Britain to compete for every unit of fuel on the international market. Greater domestic electricity production can reduce gas demand, limit exposure to international price shocks and improve long-term resilience.
Britain should build more renewable generation. It should build nuclear power, storage and transmission infrastructure.
But that only answers half the question.
Clean electricity may reduce future fossil-fuel demand. It does not automatically replace the oil and gas Britain consumes today, nor does it guarantee that the replacement infrastructure will arrive before domestic production declines.
An objective is not a completed energy system.
Electrifying Britain with some of the developed world's most expensive industrial power
The government's position contains another, more immediate contradiction.
Britain intends to electrify transport, heating and industry while imposing some of the highest industrial electricity costs in Europe.
According to the latest official international comparison, UK industrial users paid an average of 26.63 pence per kilowatt-hour in 2024.
That was the highest price among the 25 countries that reported industrial electricity data to the International Energy Agency and substantially above the IEA median of 16.33p/kWh. Britain's industrial gas price, by contrast, was slightly below the IEA median.
That comparison is for 2024 because international end-use price data is published with a lag; it remains the most recent full-year cross-country dataset — and the government's own 2026 competitiveness measures treat the gap as a live problem, not a historical one.
The exposed energy source is therefore industrial electricity — and that is precisely the energy source on which the government's transition increasingly depends.
The government itself acknowledges the scale of the problem. Its British Industrial Competitiveness Scheme documentation states that UK industrial electricity prices in 2024 were the highest in the IEA comparison and more than twice the EU-14-plus-UK median for large and very large industrial consumers.
This is not a minor competitiveness disadvantage.
It goes to the physical and economic credibility of the transition.
Steelmaking, chemicals, advanced manufacturing, data centres, electric heating and parts of transport will all require greater quantities of electricity. Yet a British company considering electrification must first pay for new equipment and then operate it using power that may cost substantially more than that paid by competitors abroad.
The government is effectively asking industry to do three things simultaneously:
- Replace fossil-fuel processes with electricity.
- Carry the capital cost of new equipment.
- Buy that electricity at some of the highest industrial prices in the developed world.
Many companies will not respond by heroically absorbing those costs.
They will delay investment, reduce production, close plants or place their next facility in a country where electricity is cheaper.
The Department for Business and Trade cites modelling which estimates that the roughly 50% rise in UK electricity prices between 2008 and 2020 reduced manufacturing investment by between 13% and 26%. The same analysis acknowledges links between high energy prices, lower productivity, reduced employment and firms leaving the market.
This creates a dangerous possibility.
Britain may reduce emissions from domestic industry not by successfully decarbonising production, but by making production uneconomic and importing the same goods from elsewhere.
A factory closes. UK electricity and gas consumption fall. Territorial emissions decline.
The steel, fertiliser, chemicals or manufactured goods are then produced abroad — frequently using fossil energy — and imported back into Britain.
That is not necessarily decarbonisation.
It may be the geographical transfer of production, employment and emissions.
The contradiction is therefore not merely that Britain is reducing domestic oil and gas production while continuing to consume those fuels.
It is that Britain is attempting to replace them with an electricity system that many of the intended users cannot afford.
A credible transition must do more than construct low-carbon generating capacity.
It must deliver usable power at a price that allows the industries expected to consume it to remain in the country.
Otherwise Britain will not have electrified its industrial economy.
It will have priced it out.
Production and consumption are being treated as separate questions
The central weakness in Britain's current strategy is that it can reduce domestic production faster than it reduces domestic consumption.
That does not eliminate oil and gas dependence.
It changes its geography.
Oil still accounted for approximately 40% of total UK energy consumption in 2024, with transport responsible for around three-quarters of petroleum-product demand.
Domestic crude and natural-gas-liquid production fell to 30.4 million tonnes that year, down 8.9%, while primary oil net imports rose by 11.7% to their highest level since 2014. UK crude production is projected to be roughly one-third lower in 2030 than in 2024 and around 85% lower by 2050.
Gas remains essential for heating, industry and flexible electricity generation.
The North Sea Transition Authority currently projects offshore gas production to decline by approximately 12% a year. As domestic output falls, Britain will become increasingly reliant on Norwegian pipelines, LNG terminals and interconnectors with continental Europe.
Imports are not inherently insecure.
Britain has successfully traded energy with reliable partners for decades, and diversity of supply can be a strength. Domestic production is itself exposed to field decline, equipment failure and maintenance interruptions.
But imports create risks that domestic production does not:
- Shipping disruption
- Foreign infrastructure failure
- International competition for cargoes
- Export restrictions
- Currency movements
- Political disputes
- Pipeline interruption
- Dependence on ports and import terminals
The renewed disruption in the Middle East has made these exposures unusually visible.
Britain may receive relatively little oil directly from the Persian Gulf, but it still pays prices shaped by what happens there. A tanker diverted from Asia, a refinery disabled in another country or a closure at a maritime chokepoint tightens the same global market in which British companies must buy.
Stopping domestic production does not stop Britain participating in that market.
It increases the share of demand that must be met through it.
The missing transition
The government repeatedly presents the choice as one between continued fossil-fuel dependence and secure domestic clean energy.
That may eventually be the choice.
It is not yet the physical reality.
Britain does not currently possess:
- A fully electrified transport system
- Sufficient long-duration electricity storage
- An unconstrained transmission and distribution grid
- Enough firm low-carbon generation to replace every function currently performed by gas
- Complete industrial electrification
- A replacement for petroleum across aviation, shipping, agriculture and construction
Wind farms produce electricity.
They do not directly produce aviation fuel, marine fuel, diesel, lubricants, chemical feedstocks or the high-temperature heat required by parts of industry.
Electric vehicles can reduce petroleum consumption, but only after the vehicles, charging networks, generating capacity and local distribution systems have been built.
Heat pumps can reduce gas demand, but only after millions of buildings have been upgraded and the electricity system can supply the additional winter load.
Industrial electrification may be technically possible in many processes, but it still requires affordable power, grid connections, capital investment and equipment that physically exists.
The latest quarterly figures show real progress: renewables supplied 51.7% of electricity generated by major power producers in the first quarter of 2026, while gas supplied 35.1%.
But over the same period indigenous energy production fell by 3.9%.
That is the transition problem in miniature.
The replacement system is growing.
The existing system is declining.
The crucial question is whether the first is becoming capable quickly enough to carry the load being removed from the second.
Until demand actually falls, reducing domestic supply does not abolish fossil-fuel consumption.
It fills the widening gap with imports.
The tieback compromise
Burnham's apparent willingness to consider greater flexibility for North Sea tiebacks offers a narrow route between the competing positions.
Transitional Energy Certificates would permit already-discovered deposits close to existing fields to connect to established platforms and pipelines. No new exploration would be allowed, but known resources could potentially be developed to support the remaining life of existing infrastructure.
This is more pragmatic than an accelerated shutdown.
But its value will depend entirely on whether it works in practice.
A mechanism can exist on paper while remaining commercially unusable.
Operators need to know:
- Whether applications will be processed quickly
- Whether environmental approval can be obtained
- Whether developments will survive legal challenge
- Whether the tax regime will remain stable
- Whether a field can operate long enough to justify investment
- Whether connected infrastructure will still exist when production begins
Rosebank and Jackdaw will be the earliest practical tests of Fahnbulleh's approach. Both already hold underlying licences, but their previous environmental approvals were overturned by the courts in January 2025 — because the emissions from eventually burning the oil and gas had not been assessed — and revised assessments are now under review. That leaves the new Energy Secretary responsible for decisions that will show whether the government's language of a "managed transition" permits major licensed developments to proceed. Offshore producers, through OEUK, have named clearing them an urgent request; environmental groups read her appointment as a sign that no substantial North Sea reversal is coming.
The oil and gas industry has an obvious commercial interest in arguing for more production.
Its claims should not be accepted uncritically.
Nor should they be dismissed without answering the underlying question.
When the government rejects or delays a domestic development, it should publish a clear account of:
- What replaces the expected production
- When the replacement becomes available
- How much additional oil or gas must be imported
- Which infrastructure will receive it
- What the balance-of-payments effect will be
- How the decision affects employment, tax revenue and industrial capability
Without that accounting, managed decline becomes an aspiration rather than a plan.
Domestic production still has strategic value
The fact that most North Sea crude is exported does not make domestic production irrelevant.
A domestically produced barrel still contributes:
- Export earnings
- Tax receipts
- Skilled employment
- Offshore engineering capability
- Pipeline and terminal utilisation
- A barrel of supply entering the wider market from which Britain buys
Domestic production also helps preserve the industrial ecosystem surrounding it.
Platforms, subsea engineering, pipelines, ports, maintenance companies and specialist workers cannot necessarily be mothballed and then recreated cheaply years later.
Once infrastructure is dismantled and skilled workers leave, the option value disappears with them.
The relevant question is not whether every British barrel remains physically inside Britain.
It is whether surrendering productive capacity before demand has fallen sufficiently makes the country more resilient or less.
Subsidising the symptom
The government has begun responding to Britain's industrial electricity disadvantage through targeted exemptions.
The British Industrial Competitiveness Scheme is intended to remove certain renewable-policy and Capacity Market costs from eligible manufacturers from April 2027. The government expects the exemptions to be worth roughly £35–£40 per megawatt-hour for qualifying businesses — cutting bills by up to a quarter for more than 10,000 manufacturers.
That may be necessary.
It is also an admission that the present system cannot deliver internationally competitive electricity prices without selectively moving costs away from particular users.
The policy raises several questions.
Who pays the costs removed from industry?
Will they be transferred to households, taxpayers or other businesses?
Which companies qualify, and what happens to those just outside the scheme?
Does Britain intend to build an electricity system that is cheap by design, or one whose underlying costs remain high but are hidden through a growing network of exemptions?
A transition dependent on permanent compensation is not necessarily an affordable transition.
It may simply be a costly system whose burdens have been rearranged.
The new Energy Secretary's five tests
Fahnbulleh should not be judged solely by arguments she made while running a think tank.
She should be judged by what she now does with responsibility for the system.
1. Timing
Will domestic oil and gas production be permitted to decline only as replacement demand reductions become real?
Or will production disappear according to a political timetable while consumption remains?
2. Affordability
Can the government reduce industrial electricity prices before requiring British industry to electrify?
The relevant measure is not how much renewable capacity has been announced. It is the delivered price paid by the factory.
3. Transparency
Will DESNZ publish an annual energy balance showing expected demand, domestic production, imports, refining capacity and infrastructure requirements under each transition pathway?
4. Deliverability
Will Transitional Energy Certificates produce commercially viable tiebacks, or become a mechanism through which the government can claim to support existing fields while approving little actual production?
5. Resilience
Will energy security be measured only through projected renewable capacity and import diversity?
Or will it include the ability to withstand:
- Shipping disruption
- Refinery failure
- Prolonged low renewable output
- Pipeline interruption
- An LNG shortage
- A cold winter
- Simultaneous stress across several supply routes
These are not arguments against net zero.
They are the questions that determine whether the transition is being engineered or merely announced.
Clean power is not yet the whole energy system
Fahnbulleh argues that Britain must escape the volatility of global fossil-fuel markets.
That is a reasonable destination.
But the route matters.
A country cannot make itself more secure by withdrawing from one system before the replacement has acquired the capacity, redundancy and affordability required to carry the load.
Britain should build wind farms.
It should build nuclear plants, storage and transmission lines. It should improve buildings and electrify transport where doing so is practical.
But it must also recognise that oil and gas will continue performing essential functions during that construction.
The choice is not between eternal fossil-fuel dependence and immediate decarbonisation.
The real choice is between a transition that matches declining production with declining demand — and one that fills the widening gap with imports while pricing domestic industry out of the country.
Miatta Fahnbulleh's appointment tells us that the government remains committed to moving quickly towards clean energy.
Her responsibility now is to prove that speed does not become exposure.
The new Energy Secretary does not need to abandon net zero.
She needs to explain how Britain avoids importing its way there — and how an economy paying some of the developed world's highest industrial electricity prices is supposed to afford the journey.