UK Prime Minister to grant “hundreds” of new North Sea oil, gas production licenses
(Bloomberg) – Prime Minister Rishi Sunak committed to granting hundreds of new licenses for oil and gas production in the North Sea.
The government said the first new permits in the current licensing round will be issued in the autumn, with over 100 expected in total. It also suggested a commitment to future licensing rounds — though that would hinge on Sunak’s party holding onto power in a general election expected in 2024.
Energy and climate policies have risen up the political agenda following Russia’s invasion of Ukraine and a cost-of-living crisis, which has fueled concerns that green policies can hurt household finances. Critics have warned that the UK has failed to invest enough to beef up energy independence as other countries, such as the US, pump money into green technology.
The move is about “strengthening our energy security,” Sunak told BBC Radio Scotland on Monday. “We’re still heavily impacted by what happens when energy supplies are weaponized by dictators.”
The Tories interpret their victory in a special election in northwest London this month — in large part due to local opposition to new charges for vehicles falling below emissions standards — as a sign that skepticism about green policies is potentially fertile ground ahead of a general election expected next year.
That point is bolstered by the fact that few energy experts believe boosting North Sea licenses will have a dramatic impact on energy security. UK oil and gas production peaked about 20 years ago and has been in near-constant decline since. New fields are still being found and exploited, but the size of the discoveries has declined considerably since the North Sea’s heyday and the bulk of the resources have already been produced.
Given the difficulties involved, it’s likely that projects licensed in the current round could end up coming online just a few years before the government’s own legally-binding 2050 to meet net zero carbon emissions.
Speaking to broadcasters on a visit to Aberdeenshire, the prime minister said approving new licenses is “entirely consistent with our plan to get to net zero” because “shipping it from halfway around the world” uses “two, three, four times” the emissions than sourcing oil and gas domestically.
“Of course, I am committed to net zero,” Sunak said. “But I’m also committed to our energy security, and we will get to net zero in a proportionate and pragmatic way that doesn’t unnecessarily burden families with costs or hassle that they don’t really need in their lives.”
The government, though, has previously said producing more North Sea oil and gas would not bring down prices because the volume the UK produces is outweighed by global factors. According to Sunak’s press secretary, the prime minister thinks investment in future technology, combined with producing more and importing less, will help control consumer bills.