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What Next for Energy? North Sea Oil and Gas Licenses Granted

energy

The UK Government has agreed to hundreds of new oil and gas licenses in the North Sea on the basis that the country needs to become more energy independent. The Government claims that Investment in the North Sea will continue to unlock new projects, protect jobs and reduce emissions. This stands in stark contrast to the Labour Party’s policy to end all off-shore drilling permits.

The Government has also stated that two new carbon capture usage and storage clusters would be set up in North East Scotland and the Humber regions.

Energy plans

The Government and the North Sea Transition Authority (NSTA) have announced a joint commitment to undertake future licensing rounds, which will continue to be subject to a climate compatibility test. By adopting a more flexible application process, licences could also be offered near to currently licensed areas to supposedly unlock vital reserves which can be brought online faster due to existing infrastructure and previous relevant assessments.

With the independent Climate Change Committee predicting around a quarter of the UK’s energy demand will still be met by oil and gas when the UK reaches net zero in 2050, the Government asserts that it is taking steps to slow the rapid decline in domestic production of oil and gas, which will secure our domestic energy supply and reduce reliance on hostile states. According to the Government, this will increase the UK’s energy security and reduce dependence on higher-emission imports, whilst protecting more than 200,000 jobs in a vital industry as we grow the UK economy.

As part of a visit to a critical energy infrastructure site in Aberdeenshire today, the Prime Minister will highlight the central role the region will play in strengthening the UK’s energy independence and meet the next generation of skilled apprentices key to driving this work forward.

The NSTA is currently running the 33rd offshore oil and gas licensing round. They expect the first of the new licences to be awarded in the autumn, with the round expected to award over 100 licences in total. The Government claims that future licences will be critical to providing energy security options, unlocking carbon capture usage and storage and hydrogen opportunities – building truly integrated offshore energy hubs that make the best use of the established infrastructure.

The North East Scotland and the Humber have also been announced as chosen locations for two new carbon capture usage and storage clusters. The Government today confirmed funding for projects Acorn and Viking, bringing the total number of Government-backed carbon capture projects to four.

Discussing the proposals in Scotland today, Rishi Sunak insisted that the schemes will create jobs, while also helping the UK on its transition to net zero. Suank said “We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world. Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses”.

“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home. We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy” Sunak continued.

Criticism

Critics have pointed out that the Government’s policy goes against environmental aims such as net zero. With Scientists also warning that the world might soon increase beyond 1.5 degrees Celsius (a point in which it is believed that climate change will be irreversible), investment into fossil fuels is angering those who are calling for a commitment to sustainability.

While many scientists agree carbon capture has an important role to play in the global transition to net zero, there are also vocal critics of the technology, some of whom argue that the benefits of carbon capture have been overstated by fossil fuel producers using it as a smokescreen to continue polluting.

Moreover, critics have pointed out that the Government is exaggerating its dedication to carbon capture. Projects such as the one at Peterhead are yet to be brought forward. Rather, the Government’s support for the Scottish and Viking Clusters are simply a step in deployment. Moreover, while most people agree that carbon capture has a role to play in the transition to net zero, many still believe its importance can be overstated and say the technology is being used to justify the continued burning of fossil fuels. Crucially, Domien Vangenechten, Senior Policy Advisor at climate think tank E3G, said the role of carbon capture during the next decade is “pretty negligible”.

Final thought

Just after Southern Europe and North Africa have experienced extreme heat and wildfires, the Government’s investment in North Sea oil and gas understandably appears disappointing to many. Moreover, doubts over both the Government’s commitment to carbon capture, and its real-term benefits, call into question the UK’s commitment to international environmental aims such as net zero.

Curia’s Energy Sustainability Commission

Curia as launched the Energy Sustainability Commission in 2023, looking to implement realistic and pragmatic solutions for the UK. Subscribe to our newsletter here for latest updates.

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