Labour’s North Sea ban is damaging business, says ExxonMobil

Energy giant ExxonMobil has accused Labour of damaging British business by banning new oil and gas drilling in the North Sea.On Wednesday, Paul Greenwood, Exxon’s UK chairman, said Ed Miliband’s block on new exploration licences, along with a lethal mix of carbon taxes and high energy prices, was “undermining” business and killing off North Sea energy.It follows Exxon’s decision on Tuesday to shut down the Mossmorran chemical plant in Fife. The factory, which made a chemical called ethylene, relied heavily on ethane for production, but Labour’s energy policy had made this too expensive, Mr Greenwood said.“Our ethylene plant and its closure is an example of how bad [government] policy is going to hurt jobs and undermine economic growth in the UK,” he said.“We take gas from the North Sea and separate out a gas called ethane, from which our plant in Fife creates ethylene.“It means I need cheap sources of abundant ethane, and I do not have it because North Sea output, due to government policy, is declining rapidly, and that ethane is increasingly high priced.”His criticism was aimed at Mr Miliband’s decision to stop issuing new North Sea exploration licences, meaning oil and gas supplies are waning rapidly as existing fields become depleted. About 180 of the UK’s current 280 active fields are predicted to close by 2030.Mr Greenwood said Exxon had spent months warning the Government of the threats to the plant – but to no avail.“We reached out to the Government back in April and had very open and frank conversations with them. I’m pleased that somebody could spend time with newer secretaries of state and ministers explaining our challenges,” he told the BBC.“We wanted to just be open – explaining how these policies are undermining our business.“The Government decided at that point that they weren’t going to be able to change those policies in order to make the plant economic. That was the decision they made, and we had to live by that decision.“What is really disappointing now, though, is that all of those policies are still in place, which means the North Sea will continue to decline.“It means we will continue to have more imports in the UK. We will be less secure in terms of our energy supply and global emissions will increase because these products will not be made there, but will be transported in.”He also lambasted the Government over its policy of taxing CO2 emissions, warning that this was imposing huge costs on UK manufacturers without any similar penalties on their overseas competitors.“These are deliberate government policies that are undermining us,” he added.Exxon’s closure coincides with a report from manufacturers’ trade body Make UK warning that surging energy costs and taxes threaten Britain’s industrial base.Elizabeth de Jong, the chief executive of Fuels Industry UK, which represents refining businesses, also said the closure was “another stark reminder of how fragile the UK’s industrial base has become”.Chris McDonald, the industry minister, said the Government had rejected the idea of financial support for Exxon’s plant because of the cost.“I want to stress that, as disappointing and concerning as the closure of the Mossmorran site is, it is not symptomatic of UK industry as a whole. Our commitment to supporting UK industry is clear.”The Department for Energy Security and Net Zero was asked for a response.