April 17, 2024

Britain has handed major oil companies the right to drill for fossil fuels in 24 new licence areas across the North Sea as part of the government’s mission to extend the life of the ageing oil and gas basin.

The North Sea regulator said 17 oil companies, including Shell and BP, were granted licences in the Central North Sea, Northern North Sea and West of Shetland areas to “provide benefits to the local and wider economy”.

The latest licences, which follow an initial tranche of 27 licences offered in October last year, could begin producing oil and gas before the end of the decade, according to the North Sea Transition Authority.

The move has angered MPs and environmental campaigners who called the move “grossly irresponsible” and accused the government of overstating the economic benefits of the North Sea and sacrificing Britain’s climate leadership for “a pipe dream”.

Graham Stuart, the minister for energy security and net zero, was forced to defend the government’s decision to encourage more North Sea oil and gas drilling despite signing up to a pledge to phase out fossil fuels at the Cop28 UN climate talks in December. He told MPs on the environmental audit committee that the new licences would be “good news in our transition to net zero”.

“If we didn’t have new oil and gas licences we would import new [liquefied natural gas] from abroad which is four times as carbon intensive as the gas produced here. I accept it’s counterintuitive but it’s not a complex argument to see it’s the right thing to do,” Stuart said. “New oil and licences strengthen our ability to get to net zero, they strengthen and support our climate leadership.”

The government has come under fierce criticism for its stated policy to extract as much oil and gas as possible from the North Sea after leading climate experts warned that fossil fuel production must end if global governments hope to curb the rise in global heating.

Philip Evans, a campaigner at Greenpeace UK, said: “The government knows that the fossil fuel industry is driving the climate crisis, but instead of cracking down on oil and gas giants like Shell, they’re greenlighting a new drilling frenzy in the North Sea.”

Critics have pointed out that the policy, which will raise billions for the Treasury in the short-term, will do little to secure Britain’s energy supplies or lower energy bills because the new licences will mostly produce oil which the UK typically exports to refineries in Europe.

Tessa Khan, the executive director of Uplift, which campaigns against fossil fuels, said: “This government is selling us a pipe dream. These new licences will do vanishingly little for the UK’s energy security and nothing to lower energy bills. In the last 13 years the government has issued hundreds of new licences, which have produced a grand total of 16 days’ worth of extra gas. And in the past decade the number of jobs supported by the oil and gas industry has more than halved.”

The industry’s trade group, Offshore Energies UK, said the new licensing rounds would help to provide an orderly transition for the industry, which continues to support about 120,000 jobs.

David Whitehouse, the chief executive of Offshore Energies UK, said: “We have over 280 oil and gas fields but by the end of the decade 180 of them will have stopped producing. We need the churn of licences for an orderly transition that supports jobs and communities across the country and meets our energy needs.”

Khan said: “What workers and the public urgently need is a government that has a coherent transition plan so workers don’t get left behind, and a laser-like focus on bringing down people’s energy bills.”

Bob Ward, the policy and communications director at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, said: “This is grossly irresponsible and undermines the best interests of the UK. The licences will not reduce energy bills or make us more energy secure. But they will further destroy the UK’s international reputation on climate change.

“This announcement will, however, undermine the confidence of investors in alternatives to fossil fuels and reduce our competitiveness in the new sustainable industries. This also suggests that the UK government did not act in good faith when it signed up to the collective decision at the Cop28 United Nations climate change summit in Dubai in November to accelerate the transition away from fossil fuels.”

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