New oil and gas licensing round goes ahead despite warnings from climate scientists

Climate Change Committee says it would support tighter limit on oil and gas production

The North Sea Transition Authority will invite energy firms to apply to explore and develop oil and gas fields despite climate scientists warning it will contribute to global heating and climate groups that it will do “precious little” to increase gas production or lower bills.

The government-owned transition authority said it is inviting applications from Friday for licences to explore and potentially develop nearly 900 areas in the North Sea which may lead to over 100 licences being awarded.

In a bid to bring forward production as quickly as possible, it said it has identified four “priority cluster areas” in the south of the North Sea that have known reserves, are close to infrastructure and have the potential to be developed quickly.

It said it would seek to licence these sites ahead of others. But noted that the average time between discovery and first production is close to five years.

The Climate Change Committee has advised that the extraction of oil and gas from the North Sea can go ahead as long as certain conditions are met. It has said it would support a tighter limit on oil and gas production, with stringent tests and a presumption against exploration, but that ultimately any new decision must be taken by ministers.

The International Energy Agency said there should be no new oil and gas field development if the world is to limit global heating to 1.5C. And the UN Chief Antonio Guterres said earlier this year that the “truly dangerous radicals” were countries that are increasing the production of fossil fuels.

The government has argued that the UK needs to boost supply to ensure its energy security following Russia’s invasion of Ukraine and decision to severely limit the amount of gas it is exporting to Europe, triggering a surge in gas prices. Liz Truss has said she wants the country to become a net exporter of energy by 2040.

But energy experts and climate campaigners point to the fact that the International Energy Agency’s definition of energy security is “the uninterrupted availability of energy sources at an affordable price”.

They say extracting more oil and gas from the North Sea won’t have a material impact on the high cost of hydrocarbons because the price is set internationally and the UK doesn’t have enough to bring down the price.

Instead they say the government should invest in energy efficiency to cut demand for energy, and should invest more in renewables that are nine times cheaper than gas. At the same time they warn it can take years to get these developments up and running, further locking the UK onto fossil fuels and potentially creating stranded assets in the future.

“Experts have repeatedly made clear that we need warmer, energy efficient homes, and a big push for cheap, homegrown, renewable power,” said Philip Evans, energy transition campaigner for Greenpeace UK. “New oil and gas licences won’t lower energy bills for struggling families this winter or any winter soon nor provide energy security in the medium term.

A photograph taken in April shows a supply vessel used in the oil, gas and renewable energy industry, docked at the Aberdeen Harbour, in Scotland. (AFP via Getty Images)

“New licences - and more importantly more fossil fuels -  solve neither of those problems but will make the climate crisis even worse.”

Greenpeace alleged that the decision was possibly unlawful and said it would be “examining” opportunities to take action.

The North Sea Transition Authority was formerly known as The Oil and Gas Authority but changed its name in March to reflect its “expanding role” in the country’s energy sector after it revised its strategy last year to put net zero “at the heart” of its work alongside stewarding production. Beyond granting licences for oil and gas it now licences carbon storage, and assesses a net zero test for new developments.

The authority said production emissions have been cut by more than a fifth between 2018 and 2021 and that projections indicate the sector is on track to meet reduction targets of 10 per cent by 2025 and 25 per cent by 2027, in line with the North Sea Transition Deal agreed between the government and industry last year.

The Climate Change Committee has recommended that emissions from offshore fossil fuel production be reduced by 68 per cent from 2018 levels by 2030. However, under the North Sea Transition Deal, the industry committed to a 50 per cent reduction in emissions – a target the committee has previously described as “insufficient”.

Tessa Khan, director of Uplift, a charity that campaigns for a fossil-free UK, said the new licensing round would do “precious little” to increase gas production.

“All this does is signal to the oil and gas companies that it’s business as usual and the government isn’t going to take any bold steps to move the UK off unaffordable fossil fuels,” said Ms Khan.

“With the UK facing blackouts this winter and gas prices likely to stay high for three years at least, the government needs to urgently turn its attention to reducing gas demand by tackling energy waste through insulation and shifting to affordable renewables.”

The application period will run until 12 January 2023 and it is expected that the first licences will be awarded from the second quarter of next year.

Energy Secretary Jacob Rees-Mogg welcomed the launch of the new licensing round saying Vladimir Putin’s invasion of Ukraine means it is “more important than ever” to make the most of domestic energy resources, strengthening energy security now and into the future.

“Ensuring our energy independence means exploiting the full potential of our North Sea assets to boost domestic production – recognising that producing gas in the UK has a lower carbon footprint than importing from abroad,” he said.

A UK Government spokesperson said the government ramains “fully committed to the legally binding target of achieving net zero greenhouse gas emissions by 2050, recognising that producing gas in the UK has a lower carbon footprint than importing from abroad.”

“With Russia weaponising energy across Europe, we must make sure we do so in a way that protects energy security, by boosting homegrown energy supply and reducing our dependence on foreign imports.

“The climate compatibility checkpoint aims to ensure that before a new oil and gas licensing round is offered, the compatibility of future licensing with the UK’s climate objectives is evaluated.”