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Unlock North Sea oil, gas, and shale reserves

Reform UK · what the evidence says

An independent, source-checked look at Reform UK’s policy “Unlock North Sea oil, gas, and shale reserves” — what it would actually do across the things that affect your life. Every claim below quotes the source behind it. How this works.

Public finances & the next generation — Little effect

minor · low confidence

Fast-tracking North Sea licences is a regulatory change with no direct government spending, so any fiscal effect runs through additional production-tax revenue — but the evidence shows new licences would add only a trivial amount of extra output, making the incremental revenue effect very small. The shale component is too speculative to count on.

The evidence

Biggest unknown: How much incremental production — and therefore taxable revenue — new fast-tracked licences actually generate above the counterfactual baseline in a declining basin.

Our reading: For O12, the relevant question is whether this policy improves or worsens the sustainability of the public finances — specifically through its effect on the revenue side (production taxes) or expenditure side (any new spending). The policy is primarily a licensing and regulatory deregulation measure: no direct government expenditure is committed in the stated text, so there is no borrowing risk and no unfunded spending to score negatively. The potential fiscal upside runs entirely through additional production-tax revenue. However, the evidence undermines a meaningful revenue gain: the basin is over 90% depleted and new licences are projected to add only four days of extra gas per year on average. Even at historical tax-contribution levels, this increment is trivially small relative to public-finances aggregates. The shale component carries additional uncertainty since there is no commercial production baseline and independent analysis places its GDP contribution at under 0.04%. In the near term, no material change to the debt path is expected in either direction. In the long term, if large-scale shale production were somehow achieved, there could be a modest positive fiscal effect, but the evidence does not support this as a realistic scenario. The verdict is therefore negligible with a slight upward lean (hence minor rather than n/a magnitude), reflecting that the mechanism is directionally positive for revenues but the scale is too small to register on any standard debt-sustainability indicator. Confidence is low because the evidence does not directly model fiscal/OBR-style impacts of the specific licensing proposals.

Prosperity & living standards — Mixed picture

minor · moderate confidence

Unlocking North Sea oil and gas would preserve some jobs and economic output in the near term, but the evidence strongly suggests it would not lower energy bills or materially boost living standards, and scrapping renewable subsidies could cost the economy tens of billions in lost investment. The net effect on prosperity is likely small and possibly negative in the long run.

The evidence

Biggest unknown: Whether scrapping renewable subsidies and net-zero policy would destroy more economic value (lost GVA from renewables) than the fossil-fuel expansion creates — this is the pivotal quantity that determines whether the overall effect on prosperity is positive or negative.

Our reading: The policy has two distinct channels through which it might affect O13: (1) expanding North Sea oil and gas production, and (2) shale gas development, alongside implied scrapping of renewable subsidies. On the near-term supply side, the North Sea remains economically active — contributing roughly £19 billion to GVA and sustaining tens of thousands of jobs — and preserving or modestly expanding that activity provides a real, if modest, economic benefit. However, the basin is mature and declining, and the evidence strongly shows that additional extraction would not reduce household energy bills (prices are set internationally) and would have only marginal effects on import dependency. The primary claimed benefit — lower energy costs boosting real living standards — is not supported by the evidence. Shale gas adds little to the picture: no commercial production currently exists, reserves are uncertain and lower than previously estimated, break-even costs are well above import alternatives, and the GDP contribution is projected to be near-negligible. This channel does not plausibly move the O13 needle at population scale. The most significant O13 consideration is the counterfactual on renewable investment. The renewable energy sector already employs 304,000 people (41% growth since 2020), dwarfing oil and gas employment. Scrapping CfD and related subsidies — a connected policy element — could cost £67–£92 billion in GVA according to cited projections. This represents a far larger potential drag on prosperity than the incremental gains from additional fossil-fuel licensing. Overall: a small near-term economic benefit from preserving North Sea activity is credibly offset, and likely outweighed, by the prospective loss of renewable investment and the absence of any real mechanism to lower energy costs. The verdict is mixed/minor — real but modest upside on one channel, credible downside on a larger one — with low confidence on magnitude because the renewable-subsidy effect depends on implementation detail not fully specified in this policy text alone.

Cost of living — Hurts

minor · moderate confidence

Expanding North Sea production and trialling shale gas are unlikely to cut household energy bills, because UK prices follow global markets that domestic output cannot move. The policy's companion measures — scrapping green levies and VAT on bills — could offer small savings, but these are separate from the drilling expansion itself.

The evidence

Biggest unknown: Whether removing green levies and VAT on energy bills (separate policy levers) would genuinely offset any cost pressures or fiscal trade-offs that arise from abandoning renewable investment.

Our reading: The central promise — that unlocking North Sea and shale reserves reduces household energy costs — is contradicted by broad analytical consensus: UK energy bills track international wholesale prices, which domestic production volumes cannot move. With 83% of UK oil exported and new gas sold into European spot markets, additional extraction does not translate into cheaper bills for UK consumers. Even the largest remaining fields (Rosebank, Jackdaw) would displace only 1–2% of gas imports, and all new licences to 2050 add on average just four days of extra gas supply per year. Shale gas is additionally uncompetitive — break-even prices are roughly double imported LNG — and the University of Manchester finds its effect on consumer bills would be almost negligible. The companion measures (scrapping green levies worth ~£203/year and removing VAT on bills) could deliver modest immediate savings, but these are levers independent of the drilling expansion itself. Against these limited upsides sits a real downside: abandoning renewable investment (scrapping CfD contracts) removes the cleaner, increasingly cheaper generation that is the most credible route to lower long-run electricity bills; losing 48 GW of renewable capacity and up to £92bn in GVA would likely raise rather than reduce costs over time. On balance, the drilling-expansion core of this policy is unlikely to improve cost-of-living outcomes and the renewable rollback companion risks worsening them in the long run. The direction is therefore a minor worsening on this fundamental, driven mainly by the opportunity cost of the energy-system choices implied, with moderate confidence because the price-setting mechanism evidence is strong but the fiscal/bill trade-offs of companion measures carry some uncertainty.

Crime, justice & national security — Little effect

minor · moderate confidence

This policy claims to boost energy security by expanding domestic oil and gas production, but analysts broadly agree it would have negligible effect on UK import dependence or resilience because production is export-oriented and prices are set by global markets. The national-security benefit is asserted but not evidenced at meaningful scale.

The evidence

Biggest unknown: Whether a future geopolitical shock could create conditions in which marginal additional domestic production provides genuine strategic buffer, even if it cannot move market prices.

Our reading: O5's national-security indicator turns on whether the policy materially improves UK resilience to external energy threats — a genuine security concern given dependence on imported gas. The policy's stated goal is precisely this: reducing import reliance. However, the evidence chain undermines the mechanism at scale. Because UK energy prices are set by international markets and the bulk of domestic oil production is exported (E5), additional extraction does not insulate the UK from price shocks or supply disruptions in the way a genuinely strategic domestic reserve would. The quantified effects are small: even the largest prospective fields displace only 1–2% of gas imports (E4), and new licences average four days of extra gas per year to 2050 (E6). On shale, there is currently no commercial production and no booked reserves (E30), and independent analysis finds negligible price or security impact (E33). The North Sea basin has declined 75% from peak and is over 90% depleted (E3), limiting the ceiling of any expansion. Experts who focus specifically on energy security — including former military figures — point to renewables and grid resilience as more effective instruments (E7). The policy's stated ambition points in the right direction for O5, but the mechanism does not fire at a scale that would move the national-security indicator meaningfully. The effect is not zero — marginal additional domestic production has some small buffer value — but it falls below the threshold for a credible 'improves' verdict. 'Negligible/minor' reflects that real but sub-threshold residual. The biggest unknown is whether a severe geopolitical disruption (e.g. a prolonged LNG supply crisis) could make even marginal domestic volumes strategically significant, but no provided evidence supports that scenario.

Clean environment & nature — Hurts

moderate · moderate confidence

Fast-tracking North Sea oil and gas licences and launching a shale gas trial would add large volumes of CO2, which the Climate Change Committee says is incompatible with UK climate goals. The main caveat is that the North Sea is already heavily depleted, so actual additional production—and its emissions—may be lower than worst-case projections.

The evidence

Biggest unknown: Whether the North Sea's declining reserves and shale's uncertain commercial viability would constrain actual production volumes enough to limit real-world emissions materially below projected figures.

Our reading: The environmental verdict points clearly toward worsening, principally through the climate and emissions channel. Fast-tracking North Sea licences would unlock additional fossil fuel combustion: projected worst-case CO2 from new licences reaches 984 megatonnes, enough to double the UK's 2023-2037 carbon budget overshoot. Even individual fields add materially (Rosebank 129 Mt, Jackdaw 32 Mt). The statutory Climate Change Committee explicitly labels new North Sea development incompatible with 1.5°C targets, and since end-use combustion—not extraction alone—drives nearly all the harm, licensed production translates directly into atmospheric emissions. The shale trial adds a further environmental risk: induced seismicity (nearly 200 earthquakes at Preston New Road) and the absence of any proven commercial production mean the upside is speculative while the downside is concrete. The basin's decline (75% below peak, over 90% depleted) caps the ceiling for additional volume, which is why magnitude is assessed as moderate rather than major—the emissions harm is real and significant, but actual incremental production from a depleted basin is lower than a greenfield scenario. Absent this policy, the trajectory would be declining North Sea output with no new shale production, so the policy's marginal contribution is genuinely additional CO2 rather than substituting for imports that would otherwise be burned elsewhere. Confidence is moderate: the 984 Mt figure is a projected upper bound from sources with advocacy ties, but the CCC assessment and field-level CO2 estimates from multiple independent sources robustly support a 'worsens' direction.

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