The report recognises that it is ‘widely acknowledged’ that most UK oil and gas fields are reaching the end of their lifespans and domestic production will follow a trend of ‘continued decline’, leading to a sharp decrease in oil and gas jobs, ‘with communities such as those in Aberdeen and Aberdeenshire affected most’.

The Committee recognises that there is ‘significant ambition’ for the North Sea to drive the energy transition towards renewable and clean energy technologies, and for existing oil and gas workers to transition into clean energy sectors. Given that the industry currently supports about 115,000 direct and indirect jobs across the UK (a decline from 190,700 in 2016, according to combined data from Offshore Energies UK and Robert Gordon University) – of which 66,000 are based in Scotland.  

However, the Committee has expressed concern that the scale-up of clean energy projects is taking longer than expected and is progressing slower than the decline of the oil and gas industry. Indeed, the industry regulator, the North Sea Transition Authority, projects that oil and gas production will decline annually between 2025 and 2030 by about 7% and 11% respectively, with North Sea production in continued decline, and an 89% fall by 2050 compared with 2024.  

The report calls on the government to set out how it intends to address this issue and urges it to take a ‘pragmatic approach’ to its North Sea licensing policy.

Tax and regulatory changes in the industry were examined by the Select Committee, and the impact on the pace and character of the transition. As a result, the Committee concludes that ‘the UK will require oil and gas to play a significant role in the UK energy mix for decades to come’ and recommends that the fiscal and regulatory regimes should reflect that environment. As a result, it warns that ‘without reform the current tax regime will accelerate the decline of the North Sea oil and gas industry and supply chain’.

On the positive side, analysis by Offshore Energies UK suggests that if managed correctly, and with a constructive regulatory and fiscal environment, half of the 13–15bn barrels of oil and gas that the UK is projected to need by 2050 could still be produced from domestic North Sea reserves.  

However, the report notes that not all North Sea produced oil and gas is used domestically, and certainly not all oil and gas consumed in the UK is domestically produced. Although most UK produced gas is used domestically and any excess is exported in summer months. By contrast, the majority of domestically produced oil is exported and refined elsewhere.

For its part, the independent Climate Change Committee (CCC) projects a significant fall in primary UK oil and gas demand of around 80% by 2050, driven mostly by the expansion of low-carbon electricity generation, electrification and subsequent energy efficiencies in heating and transport, and fuel switching.

In the light of recent regulatory changes, the Select Committee recommends that the government should issue ‘explanatory statements’ after assessing oil and gas developers’ revised environmental impact assessments for the controversial Rosebank and Jackdaw field developments.

It also examined the significance of the Grangemouth oil refinery closure, and concluded that the UK and Scottish governments should have acted sooner to prepare for the resulting job losses.

The Scottish Committee also requested better definition from the government of what constitutes a ‘just transition’ for workers and communities. There were repeated claims that the existing oil and gas workforce should be able to transition to new energy sectors, as many skills are highly transferable, ‘with some estimating that 90% of skills are transferable’.

One of the UK government’s five missions, as set out in its Plan for Change, is an aim to make Britain a ‘clean energy superpower’, with the ambition to achieve at least 95% low-carbon electricity generation by 2030 and meet net zero greenhouse gas emissions by 2050. The government launched a consultation in March 2025 to gather views on how the mission will work to manage existing oil and gas fields, as well as how to enact the government’s manifesto commitment ‘not to issue new licences to explore new fields in the North Sea’. The government’s response to the consultation is due to be published by the end of 2025.