Yahoo Finance North Sea oil drilling to continue for a decade after net zero deadline
Oil drilling in the North Sea is to continue for up to a decade beyond Britain’s net zero deadline after dozens of new licences were granted to fossil fuel companies.
Officials have approved 31 licences for oil and gas drilling in a move that will extend production until as late as 2060, about 20 years longer than previously expected.
It means that drilling is likely to continue for years after the Government’s 2050 net zero target, at which point a combination of green power and carbon capture techniques are intended to prevent any additional emissions of CO2.
The licences, along with 51 others issued since October, will allow offshore operators to extract fossil fuels equivalent to 600 million extra barrels of oil. The controversial announcement, by the Government’s North Sea Transition Authority (NSTA), will delight UK offshore operators as existing oil and gas fields dry up. However, it infuriated environmentalists who want the UK to block all fossil fuels.
Jess Ralston, an energy analyst at the Energy and Climate Intelligence Unit, said: “This decision flies in the face of advice from experts like the International Energy Agency who have said that reducing demand is the way to energy independence.
“New North Sea licenses won’t help to lower bills because the oil and gas will be sold to the highest bidder by the companies that get it out of the ground.
“We can’t control prices set by volatile international markets, so to shield ourselves from another gas crisis in future it’s clear we’ll have to reduce our demand for it.”
The licences also risk alienating wind farm operators, who have been told they may be required to give way to oil and gas operators if they target overlapping areas of seabed. Their power could also be diverted to run oil and gas platforms.
Meanwhile, the announcement is politically provocative. Ed Miliband, the shadow energy secretary, has pledged to halt all future licensing for oil and gas exploration if Labour wins power, meaning this could be the last licensing round.
By contrast, the Government wants to expand licensing, saying UK oil and gas is essential for energy security with the UK getting about 75pc of its total energy from oil and gas.
Andy Brooks, director of new ventures at the NSTA, said: “These licences could sustain oil and gas production, bringing significant benefits for jobs and the economy, and the NSTA will work with the licensees to help bring them into production as quickly as possible.”
The UK has about 280 active oil and gas fields but about 180 are predicted to close by 2030 as they run out, with many of the rest forecast to be gone by 2040.
The UK is reducing oil and gas consumption, but far more slowly than the decline in domestic production. Without the North Sea, it leaves Britain ever more reliant on imported fossil fuels.
The country uses 61m tonnes of oil a year, with petrol and diesel powering 32 million road vehicles. It also consumes about 77bn cubic metres of gas – essential for generating 35pc of UK electricity and warming the 25 million homes with gas boilers.
The licences open the way to find new fields that would extend the life of the North Sea into the 2050s – and provide the finance needed to support key infrastructure such as pipelines and terminals.
Industry trade body Offshore Energies UK (OEUK) said the new licences would strengthen energy security and boost business confidence.
David Whitehouse, OEUK’s chief executive, said: “Our sector is ramping up renewables and accelerating the drive to net zero. But this journey will take time. Meanwhile our North Sea basin is naturally declining. We need the churn of licences for an orderly transition that supports jobs and communities across the country and meets our energy needs.”
The UK’s offshore operators have produced 47 billion barrels of oil from the North Sea, Irish Sea and Atlantic waters over the last five decades.
Earlier this year Stuart Payne, chief executive of the NSTA, said a further nine billion barrels remained in parts already explored with an estimated 15 billion barrels more in unmapped areas. Oil and gas production could continue for “another four decades,” he said.
The UK offshore wind industry dismissed suggestions it would have to give way to oil and gas. Dan McGrail, chief executive of RenewableUK, the wind industry’s trade body, said: “The Government should be crystal clear that its priority is renewables over oil and gas. Offshore wind is going to be the backbone of our future system, not fossil fuels.”
Environmentalists said new licences would do little to boost energy security – but would instead undermine UK climate ambitions.
Tessa Khan, executive director of Uplift, a green campaign group, said: “This isn’t an energy strategy, it’s a pipedream. This licensing round, first announced under Liz Truss’ government, is likely to result in very little oil and gas reaching the UK.”
