UK Government approves new North Sea oil and gas licences amid climate backlash

The UK Government has announced the award of 27 new licences for oil and gas exploration in the North Sea, sparking outrage from environmentalists and green politicians.

What are the new licences and why are they controversial?

  • The new licences are part of the 33rd licencing round by the North Sea Transition Authority (NSTA), which oversees the development of the UK’s offshore energy resources.
  • The licenced blocks are located in the Central and Northern North Sea and West of Shetland, and have the potential to produce oil and gas within the next five years.
  • The UK Government says the new licences will help reduce the country’s reliance on foreign imports and support its energy security, while also ensuring that the industry meets its net zero commitments by 2050.
  • However, climate campaigners and green politicians have condemned the decision, calling it “despicable”, “reckless” and “an environmental disaster” that will undermine the UK’s climate leadership and worsen global warming.

How much oil and gas is there in the North Sea?

  • The North Sea is one of the world’s largest offshore oil and gas provinces, with more than 40 billion barrels of oil equivalent (boe) produced since the 1960s.
  • According to the NSTA, there are still around 10 billion boe of recoverable reserves in the UK Continental Shelf (UKCS), which covers the North Sea, the Irish Sea and parts of the Atlantic Ocean.

north sea oil and gas rig

  • However, production has been declining since its peak in 1999, and many fields are nearing the end of their life. The NSTA estimates that around 180 out of 284 offshore fields will cease production by 2030.
  • The UK is a net importer of oil and gas, meaning it consumes more than it produces. In 2020, it imported around 47% of its oil and 53% of its gas from countries such as Norway, Russia and Qatar.

What is the impact of oil and gas on the climate?

  • Oil and gas are fossil fuels that emit greenhouse gases when burned, such as carbon dioxide (CO2) and methane (CH4). These gases trap heat in the atmosphere and cause global temperatures to rise, leading to more extreme weather events, sea level rise, biodiversity loss and human health problems.
  • The UK has committed to reaching net zero emissions by 2050, meaning that any remaining emissions must be balanced by removing an equivalent amount from the atmosphere. This can be done by using carbon capture and storage (CCS) technologies or enhancing natural sinks such as forests and soils.
  • The oil and gas industry says it is committed to reducing its emissions and supporting the transition to a low-carbon economy. It has set a target to cut its operational emissions by 50% by 2030 and to achieve net zero by 2050.
  • However, critics say that these targets are not enough and that the industry should stop exploring for new fossil fuels and invest more in renewable energy sources such as wind, solar and tidal.

How does the UK compare to other countries on oil and gas?

  • The UK is not alone in pursuing new oil and gas developments despite its climate pledges. According to a report by Global Witness, a watchdog group, more than 30 countries have awarded or plan to award new licences for offshore drilling since the Paris Agreement was signed in 2015.
  • Some of these countries include Norway, Brazil, Mexico, Australia, Egypt and Angola. The report warns that these new projects could release up to 18 billion tonnes of CO2 into the atmosphere over their lifetime, equivalent to nearly half of the remaining global carbon budget to limit warming to 1.5°C.
  • On the other hand, some countries have taken steps to limit or phase out their oil and gas production in line with their climate goals. For example, France has banned new exploration permits since 2017 and plans to end all production by 2040. Denmark has also stopped issuing new licences and will end its existing production by 2050.

What is the future of oil and gas in the North Sea?

  • The future of oil and gas in the North Sea is uncertain, as it depends on various factors such as market prices, technological innovation, regulatory changes and public opinion.
  • The NSTA says it will continue to award new licences in tranches, with those that have lower environmental impacts or higher social benefits taking priority. It also says it will support the diversification of the industry into other sectors such as hydrogen, CCS and offshore wind.
  • However, some analysts say that the demand for oil and gas will decline in the coming years as more countries adopt clean energy policies and consumers switch to electric vehicles and heating systems. They argue that investing in new fossil fuel projects is risky and wasteful, as they may become stranded assets or require costly decommissioning.
  • The question remains: will the UK Government heed the calls to stop new oil and gas licences in the North Sea, or will it continue to support the industry despite the climate crisis?
By Ishan Crawford

Prior to the position, Ishan was senior vice president, strategy & development for Cumbernauld-media Company since April 2013. He joined the Company in 2004 and has served in several corporate developments, business development and strategic planning roles for three chief executives. During that time, he helped transform the Company from a traditional U.S. media conglomerate into a global digital subscription service, unified by the journalism and brand of Cumbernauld-media.

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