Ministers are considering declaring the beginning of the end for the North Sea oil industry with a ban on new exploration licences.
The radical move is on the table as part of a decisive shift away from fossil fuels and as part of preparations for the crucial climate summit the Government is due to host in Glasgow in the autumn.
Britain is already legally bound to deliver “net zero” carbon emissions by 2050. Options being consulted on are understood to include an end to issuing licences in 2040, and an immediate temporary pause in licences. No change to the licensing regime is also possible.
One industry source said a decision is close. A ban on new licences would begin the terminal decline of British exploration in the North Sea and would be particularly controversial in Scotland.
An estimated 39pc of the 270,000 total UK jobs supported by the oil industry are in Scotland – more than any other UK region – and the SNP has relied on forecasts of future North Sea tax revenues to claim that the nation could pay its way outside the Union.
Oil and gas reserves from the UK Continental Shelf are dwindling since their heyday in the 1970s and 1980s, but had been expected to play a significant role in its long-term energy needs, as well as in production of plastics and chemicals.
More than 30pc of the UK’s electricity in 2020 was generated by gas-fired power plants, while the offshore industry met about 45pc of its overall energy needs in 2019, according to industry figures.
Although that will change as wind turbines and electric cars come to the fore, any restrictions on licences are likely to trigger debate about whether the move would simply increase Britain’s reliance on imported gas and oil, potentially increasing emissions due to transportation requirements.