UK’s new oil and gas bill won’t improve energy security or lower bills, study warns

UK oil exports surged from 68% to 81% between 2004 and 2022.

A new study from Global Witness reveals that despite the sale of approximately 1,700 new oil and gas licenses over the last twenty years, the UK’s energy security from the fossil fuels has regressed due to a surge in exports and a steep decline in oil production.

According to the analysis, the UK Government granted a total of 1,680 new licenses for oil and gas exploration between 2004 and 2023; however, production plummeted by 60% during roughly the same period.

In parallel, UK oil exports surged from 68% to 81% between 2004 and 2022.

In November of last year, the Government introduced its Offshore Petroleum Licensing Bill, promoting the expansion of oil and gas licensing and asserting that annual oilfield development would enhance the nation’s energy security and alleviate energy costs for households.

This is despite the fact that oil and gas are internationally traded commodities. The UK will have no right to keep oil and gas produced in its own North Sea fields and instead will sell internationally to the highest bidders.

Moreover, green groups have argued that the proposed bill significantly falls short of aligning with the UK’s net-zero by 2050 pathway.

Global Witness’ senior campaigner Jonathan Noronha-Gant said: “The new annual licensing law will do nothing for UK energy security and will allow private companies to send more expensive, polluting fossil fuels abroad.

“This unpopular policy will only prolong the current energy problems we face. People want long-term solutions to help bring down their bills and fight the emissions damaging the climate. New oil fields will only line the pockets of rich fossil fuel firms; they won’t help the millions of Brits struggling to pay their bills.”

Potential continuation of export trends

Oil and gas, being globally traded commodities, are not entirely retained by nations. Instead, it is deemed more economically advantageous to engage in international trade, allocating resources to markets with high demand and willingness to pay premium prices.

It is estimated that around 80% of additional oil and gas resulting from expanded North Sea production would be sent overseas.

Earlier this month, Minister Amanda Solloway MP suggested that export trends could continue, stating that it “is not desirable to force private companies to allocate oil and gas produced in the North Sea for domestic use”.

Against the bill

Last week, Net-Zero Review author Chris Skidmore resigned from the Conservative whip in protest against the new bill, calling it ‘a global signal that the UK is rowing even further back from its climate commitments.’

Later in the same week, Conservative MP Alok Sharma, who in 2021 chaired the UN’s annual climate summit in Glasgow, declared that he will not vote for Rishi Sunak’s oil and gas licencing bill.

This has added additional scrutiny to the Offshore Petroleum Licensing Bill proposed by the Government.

The next discussion on the Bill is expected to take place on Monday, 22 January, followed by a vote later that evening.

Comments (1)

  1. Richard Phillips says:

    Oil and Gas are a private industry enterprise.
    What else is there to be said, they promote their own interests, naturally.

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