Predictions of thousands of job losses in Britain�s oil and gas fields, which have been gathering pace for several months, have been given new urgency with the confirmation of a dramatic collapse in the number of exploration wells being drilled in the North Sea.

Predictions of thousands of job losses in Britain's oil and gas fields, which have been gathering pace for several months, have been given new urgency with the confirmation of a dramatic collapse in the number of exploration wells being drilled in the North Sea. In the first quarter of 2009, only 18 exploration and appraisal wells were sunk - a drop of 78% compared with last year, understandable in the current financial climate.

Oil and gas extraction in the North Sea is at a particularly vulnerable stage.

As a mature field, it passed peak oil at the turn of the century; with the older, bigger and easier oil fields running dry, major companies have been moving out. The host of small independent companies exploring the new, smaller fields, where reserves are usually more technically difficult to access, have been dealt a double blow by the falling price of oil and the difficulty of raising finance as a result of the credit crunch.

With prices between $40 and $50 a barrel, the majority of new oil fields are only marginally profitable and the prospect of the weakest companies failing has prompted Oil & Gas UK, the industry body, to forecast a 66% drop in exploration and warn that half the infrastructure in the North Sea could be decommissioned within a decade. This is a faster decline than previously envisaged, putting 50,000 jobs in the industry workforce of 400,000 at risk over the next two years and shortening the life of the North Sea oil industry by 10-15 years.

The industry has been lobbying for more tax breaks in next week's Budget to encourage investment (which is predicted to decline by anywhere between 6% and 27% this year). Their case deserves consideration. Not only do jobs offshore generate a chain of others onshore in the supply-chain and service industries, but North Sea oil and gas currently satisfies 70% of our primary energy demand. A steep fall in production (possibly meeting only 12% of domestic demand by 2020) would not only require more imports but, with the industry contributing one-third of the UK's corporation tax, have far-reaching consequences across the economy.

This, however, underlines the urgent need for investment in alternative sources of energy. The UK has been too slow to exploit the advantages of its island situation and establish offshore wind energy. Energy companies that already have experience of working offshore ought to be capitalising on that to develop the infrastructure for wind technology. In the longer term, it makes more sense to incentivise investment in green energy - and if the government is to meet its legally binding target of sourcing 15% of energy from renewables by 2020, it must take action now. Transferring jobs from the extraction of fossil fuels to the harnessing of green energy makes sense economically, environmentally and socially.