Lessons from Oil and Gas
Transitions in the North Sea

Executive summary

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.