Denmark to end oil and gas production

Article by Amanda Doyle

THE Danish Government has agreed to end all oil and gas exploration and extraction in the North Sea by 2050.

Last year Denmark committed to reducing its emissions by 70% by 2030 and net zero by 2050. Denmark is the EU’s largest producer of oil and gas and the Government has now agreed on a deal to phase out oil and gas production by 2050. It has cancelled its latest licensing round and all future rounds, however exploration will still be allowed under current licences. 2050 will be the last year that fossils fuels can be extracted.

According to Reuters, the Ministry of Climate, Energy and Utilities estimated that the cancelled licences and the cut-off date will lead to a loss of around kr13bn (US$2.1bn), however there is a lot of uncertainty in the figure.

The agreement will ensure stability through two other limited licensing schemes that would still have to adhere to the 2050 cut-off date. It takes into account the need for a just transition for the impacted workers to find employment. In 2016, the latest for which data is available, 4,000 people worked in the extraction industry. The agreement will also consider electrification for current production in the North Sea, and assess the feasibility of for the storage of carbon dioxide.

Deirdre Michie, Chief Executive of Oil and Gas UK, told The Guardian that a strict cut-off date could lead to unintended consequences for investments and jobs in the sector. Dan Jørgensen, Danish Minister for Climate, Energy and Utilities said in an interview with The Guardian that while the industry was not happy about the decision, he thought they would be happy knowing the exact conditions of the cut-off as the Government has no intentions of bringing the date forward, and the deal is binding with future Governments.

Jørgensen said in a statement: “As a small country our only chance to make a real dent in the global emissions curve is to lead the way by example. We intend to show what an ambitious yet balanced phase-out of fossil fuel production might look like, taking into account both the urgency of climate change and the very real concerns of workers employed in the fossil sector. Just transition has to be part and parcel of any socially-balanced approach. Hopefully we can inspire others to follow suit.”

Article by Amanda Doyle

Staff Reporter, The Chemical Engineer

Recent Editions

Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.