Green groups slam UK government’s refusal to rule out new North Sea oil and gas exploration


Environmental groups have responded angrily to the publication of the UK government and industry-backed North Sea Transition Deal, arguing the refusal to rule out the possibility of a new wave of oil and gas exploration licenses and the failure to set a target for ending fossil fuel extraction from UK waters amounted to "a colossal failure in climate leadership in the year of COP26".

Campaigners had hoped that in the wake of the UK's binding net zero emission target and Denmark's recent decision to end the issuance of new oil and gas exploration licenses, the government could set out a clear strategy for ending fossil fuel extraction from the North Sea basin.

However, last week's wide-ranging sector deal with the oil and gas industry combines plans for increased investment in the technologies and skills that will enable a transition to cleaner energy sources with proposals that leaves the door open for a new wave of exploration licenses, if projects can pass a new Climate Compatibility Checkpoint.

The UK government insisted the sweeping package made the UK the first G7 country to agree a landmark deal to support the oil and gas industry's transition to clean, green energy, while supporting 40,000 jobs and mobilising £16bn of public and private sector investment through to 2030 in emission reduction efforts.

"Today, we are sending a clear message around the world that the UK will be a nation of clean energy as we build back better and greener from the pandemic," said Business and Energy Secretary Kwasi Kwarteng. "We will not leave oil and gas workers behind in the United Kingdom's irreversible shift away from fossil fuels.

"Through this landmark sector deal, we will harness the skills, capabilities and pent-up private investment potential of the oil and gas sector to power the green industrial revolution, turning its focus to the next-generation clean technologies the UK needs to support a green economy."

He added that the promise of fresh investment in carbon capture and storage, hydrogen, and renewables technologies would also help attract inward investment for the UK. "At every step on the path to net zero emissions, we will create the right conditions for new green industries to base themselves in the UK and create new high-value employment opportunities, while future-proofing existing businesses to secure the long-term viability of jobs in our industrial heartlands," he said.

Specifically, the new deal includes a commitment for joint government and oil and gas sector investment of up to £16bn by 2030 to reduce carbon emissions, including up to £3bn to replace fossil fuel-based power supplies on oil and gas platforms with renewable energy, up to £3bn for Carbon Capture Usage and Storage projects, and up to £10bn for new hydrogen production capacity.

The investment will support new targets from the industry to reduce its direct emissions by 10 per cent by 2025 and 25 per cent by 2027, before then slashing emissions by 50 per cent by 2030.

And in a bid to maximise investment in the UK, the plan also includes a voluntarily commitment from the industry to ensure that 50 per cent of its offshore decommissioning and new energy technology projects will be provided by local businesses, and proposals for a new Industry Supply Chain Champion to support the coordination of local growth and job opportunities with other sectors, such as Carbon Capture Usage and Storage and offshore wind.

Alongside the deal, the government also published a response to its consultation on ending support for overseas fossil fuel energy projects through UK Export Finance, confirming it is to no longer provide support for the fossil fuel energy sector overseas from 31 March 2021.

However, it also set out plans for a new Transition Export Development Guarantee', developed by UK Export Finance (UKEF), which would "ensure that businesses, including the supply chain, are supported at all stages of their transition journey and that oil and gas focused companies with credible transition plans can benefit from UKEF's working capital support to achieve these plans".

The UK government stressed the new package of measures would help ensure an orderly transition towards a net zero emission energy system, which maintains energy security, supports high-value jobs, and safeguards the expertise necessary to deliver lower carbon infrastructure.