“IT SIMPLY won’t do what the prime minister claims,” said Green Party MP Caroline Lucas, after the king’s speech unveiled a planned bill to mandate annual oil and gas licensing in the North Sea.
Set out in the UK government's law-making plans for the year ahead, and aimed at bolstering energy security, the legislation underpins prime minister Rishi Sunak’s claim that the certainty of future licensing would “help reduce energy bills”.
Currently, there is no set schedule for oil and gas licensing rounds, though they can occur as often as once per year based on the decision of the North Sea Transition Authority (NSTA), which regulates the industry.
Under the new legislation, the NSTA would be required to invite applications for new licences if two key tests are met. A licensing round would depend on whether the UK is projected to import more oil and gas from abroad than it produces domestically. Additionally, the carbon emissions associated with the production of UK gas will need to be lower than the equivalent emissions from imported liquefied natural gas.
These considerations are already part of the UK’s climate compatibility checkpoint which aims to ensure that licensing is compatible with the nation’s climate objectives, prior to a new round.
Lucas responded to the announced bill by calling for an end to “governing by gimmick” and to weaponising issues like climate change.
She added: “When it comes to energy what [the prime minister] should have been doing is unleashing that huge potential in energy efficiency and renewable energy. That is the way to keep people’s fuel bills down, to have real energy security and, crucially, to tackle the climate crisis as well.”
The government noted that the UK currently relies on oil and gas for about three-quarters of its energy needs, and that dependence is expected to continue.
Sunak claims the UK’s plan for net zero will allow transition “without adding undue burden on households”. He added: “Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources. The clarity and certainty that our new legislation will provide will help get the country on the right path for the future.”
He has previously said that the UK would be “pragmatic, proportionate, and realistic” in its approach to net zero, arguing that the UK was already ahead of other countries.
Claire Coutinho, secretary of state for energy security and net zero, said: “As energy markets become more unstable it’s just common sense to make the most of our own homegrown advantages and use the oil, gas, wind, and hydrogen on our doorstep in the North Sea. Rather than importing dirtier fuels from abroad, we want to give industry the certainty to invest in jobs here and unlock billions of pounds for our own transition to clean energy.”
In addition to offering cleaner hydrocarbon production, the government said that domestic supply could help to unlock green investment, drawing on the key role that UK oil and gas plays, and driving forward investment in clean technologies needed to realise net zero targets.
According to Offshore Energies UK (OEUK), which represents the offshore energy industries, there are just under 300 active oil and gas fields in the North Sea, and more than half are set to cease production by 2030 owing to natural decline.
David Whitehouse, CEO of OEUK, said: “The UK needs the churn of new licences to manage production decline in line with our maturing basin. A predictable licensing process with transparent checks will support the highly skilled people working in the sector, while ensuring the granting of new licences is compatible with energy security and net zero.”
Jon Butterworth, CEO of UK system operator National Gas, said that gas is the “backbone of our nation’s energy system”, adding that the company was “delighted to see the government give their firm backing to the UK’s gas sector”.
Greenpeace UK referred to today’s king’s speech, the first by King Charles, as “pure distraction tactics”. It argued that “while the world's superpowers invest heavily in renewables, our prime minister is handing out licences to his mates in the fossil fuel industry. New oil won’t lower bills or deliver energy security”.
Indeed, Coutinho has said that “it wouldn’t necessarily bring energy bills down”.
Furthermore, despite the UK’s claims that the announced bill would bolster energy security, government data shows that the nation currently exports 80% of the oil it produces in the North Sea.
Meanwhile, shadow climate and net zero secretary Ed Miliband said: “It is precisely our dependence on fossil fuels that has led to the worst cost of living crisis in generations. All this embarrassing stunt tells you is that Rishi Sunak is continuing with his retreat from net zero.”
Paul Willacy, managing director of waste-to-hydrogen firm Compact Syngas Solutions, was also let down by the speech from King Charles, whom he noted has spent decades “preaching the need for action on the environment, and here is his government going in the opposite direction”.
“The country needs action now on new emission-free alternatives for the transport industry, and it’s disappointing to see the can get kicked down the road again.”
Today’s news is just the latest in a string of disappointments for environmentalists who in September found cause for criticism as the UK government announced it was delaying climate pledges. More recently, the UK government dismissed a number of recommendations from the Climate Change Committee (CCC) aimed at accelerating net zero progress, after it noted a “lack of urgency” in its 2023 progress report.
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