Politics

UK Government sets out climate checklist to approve future oil and gas proposals

INDUSTRY leaders have welcomed plans for a climate compatibility checkpoint for new North Sea oil and gas projects to maintain investor confidence – with the number of licences granted not expected to decline.

But the UK Government plans, which would allow new fossil fuels projects to be granted permissions if they meet certain criteria, have been labelled a “betrayal of future generations” by “pretending that oil and gas can continue to expand”.

The UK Government has pointed to its planned checkpoint as justification for pressing ahead with future oil and gas exploration – while the controversial plans for the Cambo oil field near Shetland, currently paused by Siccar Point Energy, would likely not need to meet the conditions as an extension of an existing oil field.

The draft checkpoint, which has been put out for consultation by UK ministers, comprises a series of “tests” that must be passed otherwise it “would likely require a pause in licensing” until the criteria is met.

The six proposed checkpoints include ensuring the oil and gas sector as a whole is on track to reduce emissions as promised and incentivise investment and development of transitional technologies such as carbon capture and hydrogen.

UK Energy and Climate Change Minister Greg Hands said: “This new checkpoint will be key to our plans to support the oil and gas sector during its net zero transition.

“It helps safeguard the future of this vital UK industry as we create more opportunities for green jobs and investment across the country.”

The industry body for the North Sea oil and gas sector, has welcomed the proposals – stressing they could be key to unlocking investment amid the climate crisis.

Teh sector was dealt a blow when Shell pulled out of the Cambo project on economic grounds, leading to the project being put on hold.

Katy Heidendreich, OGUK supply chain and operations director, said: “Our sector strongly supports the UK Government’s ambition to demonstrate international leadership in delivering a just transition to net zero emissions by 2050.

“The UK’s domestic oil and gas industry has a critical role in maintaining the country’s energy security, being a major contributor to our economy and the sector’s skills, experience and investment will be key to delivering a successful energy transition at pace.

“Our industry welcomes the transparency that a checkpoint for future BEIS licensing decisions provides. It is vital that this checkpoint is robust and ensures that future licensing rounds are compatible with the UK’s climate change ambitions, while maintaining investor confidence in the UK Continental Shelf.”

The first of six proposed tests would require the oil and gas sector to keep emissions reductions set out in the North Sea Transition Deal on track – with a pledge to cut emissions by 50 per cent of 2018 levels by 2030 and 100% by 2050.

But the draft plan stresses “there would need to be a grace margin afforded to the sector” before further licensing rounds are paused.

The reductions in emissions would also be benchmarked internationally under the second test, which would stop the possibility of emissions being exported, known as carbon leakage.

The third proposed test would ensure a positive outcome “while the UK remains a net importer of oil and gas” to cut reliance on imports.

Test four would ensure the sector keeps up the pace in developing transitional technologies that will allow the energy industry to thrive while cutting its contribution to the climate emergency.

Further proposed tests include the consideration of what is known as “Scope 3 emissions”, which are more carbon-intensive and could deal with how the oil is used.

The final proposed test is “consideration of the global production gap” which is the “discrepancy between all countries’ planned fossil fuel production and global production levels consistent with limiting warming to 1.5°C or 2°C”.

In a press briefing, Mr Hands said it was not necessarily the case that the number of new fossil fuels extraction licences being approved would decline, stressing “clearly we are expecting there to be future licences”.

The minister was asked repeatedly to explain how the UK Government’s plans are compatible with the International Energy Agency’s appeal that no new oil and gas developments should go ahead in order to keep efforts to limit global warming on track.

Mr Hands said: “Looking at what the IEA said, it was very much a kind of global scenario.

“We don’t think that what we’ve announced today is incompatible, or future licence rounds are incompatible, with what the IEA said.”

Scottish Greens climate and energy spokesperson, Mark Ruskell, said: “It takes a fair amount of arrogance and hubris to think that the International Energy Agency’s evidence-led call for there to be no new exploration for fossil fuels applies everywhere but the UK.

“No one is talking about closing down the sector overnight, but pretending that oil and gas can continue to expand is a betrayal of future generations and of the communities who need investment in alternative jobs and energy solutions.

“Scotland is doing what we can with Greens in government, but it’s high time the UK Government listened to the International Energy Agency and UN scientists and planned for the future.”

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