BEIS to review whether UK’s oil and gas licencing regime is net-zero compatible

The UK's oil and gas sector employs 270

The Department has repeatedly stated that continued oil and gas production will play a role in the UK’s economy through to 2050 and beyond. While it is predicting a fall in demand from the electricity and transport sectors due to electrification, BEIS believes that fossil fuels will still be used for heating and cooking within this timeframe. Moreover, fossil-based carbon is used to produce medicines, cosmetics, cleaning products and plastics.

The review will ascertain what role the domestic oil and gas sector should play in an economy which is transitioning to net-zero, and how the 270,000+ people it employs should be supported throughout this process.

Preliminary findings from the review will be published alongside the Energy White Paper, which is due before the end of 2020 after a string of delays. Existing production facilities, pipeline projects and longer-term plans will all be covered.

Its recommended measures will then be embedded in the North Sea Transition Deal. Due for publication within this Parliament, the Deal will outline how the government will work with the domestic oil and gas sector to protect jobs and improve skills throughout the transition to low-carbon energy systems.

“While we have decarbonised our economy faster than any other major country over the past two decades, the oil and gas sector will continue to be needed for the foreseeable future,” BEIS Secretary Alok Sharma said.

“Our review into future oil and gas licensing rounds will ensure we are able to meet our net-zero target while protecting jobs across the country as part of our plan to build back better with a greener, cleaner economy.”

The review comes as Oil and Gas UK – the trade body for the sector – is striving to halve emissions from production and exploration within a decade. Critics are pressuring the organisation to introduce further measures covering Scope 3 (indirect) emissions and to set time-bound targets to cap production.

A green recovery for Scotland

In related news, Scotland has this week published its 2020-2021 Programme for Government, earmarking multiple multi-million-pound pots for the green economy.

Included in the Programme is a £100m Green Jobs Fund and a £25m National Transition Training Fund. The former will be used to support those who are out of work or who are in non-related industries gain the skills they need to take up roles in the renewable energy, energy efficiency and cleantech sectors. The latter will upskill those working in high-emitting sectors which will downsize in the coming decades.

Scottish Renewables’ chief executive Claire Mack called the measures “significant steps forward” for the nation’s low-carbon energy industry.

“In particular, [it is] important that Scotland’s skills and enterprise agencies and skills providers work in tandem with industry to ensure that skills which are delivered are those which are required,” Mack said.

Also included in the Programme for Government is a £60m fund to help industrial and manufacturing sectors decarbonise; a £150m pot for woodland creation projects, to be allocated through to 2024; £150m to improve flood risk management and £70m to create a more circular waste management sector.

Scotland is notably targeting net-zero by 2045.

Sarah George