Report: U.K. must "decarbonise" as oil industry faces loss of up to 50,000 jobs

The “lack of affordable credit” and “bleak prospects for investment” are just two factors that could lead to the loss of tens of thousands of jobs in the U.K.’s oil and gas sector.

In a groundbreaking report released today (June 30), the U.K.’s House of Commons energy and climate change committee boldly stated: “If the industry’s worst case scenario is realised in 2010, then 50,000 jobs could disappear and production would fall significantly.”

Right at the beginning of the 59-page report is the caveat: “It is vitally important swiftly to decarbonise the UK economy if the country is to meet its obligations to tackle climate change, and clearly the use of fossil fuels must diminish.”

According to the report, the U.K. has produced more than 38 billion barrels of oil equivalent over the past 40 years. Although production peaked in 1999—meaning the country is now a net importer of energy—one billion BOE of oil and gas were recovered in 2007. The U.K. still ranks eighth in the world among gas producers, the report adds.

“There are tensions between the objectives of achieving affordable and secure energy and reducing carbon emissions,” the report states. “If we are to move towards a low carbon economy, our reliance on fossil fuels needs to diminish. This transition is a necessary one and one which we support wholeheartedly. But it will not happen overnight; and it is in the UK’s interests to exploit its remaining oil and gas resources in a strategic manner, both to help achieve a secure supply of energy and to support the many workers and companies reliant on the industry.”

In an April 13 phone interview, Bill Rees, a UBC professor of community and regional planning, said the blame for this situation lies with the neoconservative governments of the triumvirate of Margaret Thatcher, Ronald Reagan, and Brian Mulroney. Rees said these three all did little to preserve the resource in their years at the helm and allowed world prices to collapse after supply ballooned to meet increasing demand. This has led to rapid depletion of oil and gas.

“If you lower taxes and artificially create lower prices for energy and other things such as food, then people will overspend on those areas—which is a mark of economic efficiency—which causes greater and greater environmental damage,” said Rees, creator of the ecological footprint concept. “Which is exactly what we’re doing. So the ironic thing is, because we have socially engineered people into this insane idea that governments are bad and taxes are evil, our principle response to the current financial crisis and to the ecological crisis is to lower taxes even further and to try to recreate the same system that caused the problem in the first place. So we just double and redouble the damage. We are so completely unconscious of what is going on here as a culture.”