COP26 President Alok Sharma to oppose North Sea fossil fuel expansion bill

Pictured: Sharma at COP28 in December 2023. Image: UNFCCC Flickr / Kiara Worth

Sharma appeared on BBC Radio 4’s ‘Today’ programme on Monday morning (8 January) to confirm his stance ahead of the Offshore Petroleum Licencing Bill’s second reading in Parliament, stating that the Bill “reinforces the unfortunate perception about the UK rowing back from climate action”.

Sharma said: “Just a few weeks ago at COP28, the UK Government signed up to transition away from fossil fuels. This bill is actually about doubling down on new oil and gas licences. It is actually the opposite of what we agreed to do internationally, so I won’t be supporting it.”

Introduced to Parliament in November 2023, the Bill will compel all future Governments to hold annual licencing rounds for oil and gas exploration and extraction in the North Sea.

These rounds have been held in most years to date. Sunak and predecessor Liz Truss made a point, however, of attracting more widespread media attention to the announcements of the two most recent rounds. Sunak travelled to Scotland in summer 2023 to announce the next round and did so during Parliament’s summer recess.

A key part of the Government’s reasoning for enacting the Bill is to differentiate the Conservative party’s stance on oil and gas expansion from other major political parties ahead of the next general election, which is expected to be called in the latter half of 2024. Labour has pledged to stop holding licencing rounds if elected, so this Bill would complicate the delivery of that promise.

Sharma is not the only Tory MP against the bill. Former Energy Minister and author of the Net-Zero Review Chris Skidmore last week resigned from the Conservative whip in protest.

Lord Zac Goldsmith, former minister for international climate and environmental diplomacy, is urging other Conservative MPs to follow Sharma’s example if they wish to be “on the right side of history”.

Cost claims controversies

As well as disliking the message the Bill would send internationally, Sharma has stated that he questions the Government’s assertions that additional domestic oil and gas production would reduce energy costs for consumers.

Oil and gas are internationally traded commodities. Nations do not get to keep all of their own production, instead finding it far more economically beneficial to trade internationally with allocations to markets with the highest demands and willing to pay the highest prices.

It is estimated that around 80% of additional oil and gas resulting from expanded North Sea production would be sent overseas. The Government has stated that it “is not desirable to force private companies to allocate oil and gas produced in the North Sea for domestic use”.

A new analysis from the Energy and Climate Intelligence Unit (ECIU) this week revealed that, with no new oil and gas extraction and refining capacity, British fossil fuels would account for one in every 24 litres of petrol and one in every 31 litres of diesel sold in the UK by 2030. With additional capacity, the proportions would be one in every 20 litres of petrol and one in every 26 litres of diesel.

The think-tank foresees a potential price differential for road and aviation fuels, resulting from North Sea expansion, of just 1%.

“New licences are a distraction from policies that would have a real, lasting impact on the UK’s energy independence,” said the ECIU’s head of analysis Dr Simon Cran-McGreehin.

“The Government’s recently introduced Zero-Emission Vehicle mandate to boost electric vehicles will have a much bigger impact by reducing our demand for oil in the first place. But much more could be done to boost the UK’s energy independence by properly backing British renewables and helping people insulate their homes to cut energy waste.”