The Offshore Petroleum Licensing Bill passed its second reading in the Commons on Monday.
The Bill is designed to safeguard the UK’s domestic energy supplies and increase certainty for the oil and gas industry by requiring the North Sea Transition Authority to run an annual process inviting applications for new production licences in the UK’s offshore waters, subject to key tests being met.
The Bill’s purpose is to enhance the UK’s energy security and reduce dependence on higher emission imports from overseas, including from countries like Russia, and protect the domestic oil and gas industry that supports more than 200,000 jobs as the Government grows the UK economy and realise its net zero target.
The domestic oil and gas industry is vital to the UK’s energy security and economy. The introduction of regular licensing for exploration will increase certainty, investor confidence and make the UK more energy independent. This new regime will be subject to 2 key tests being met: that the UK is projected to remain a net importer of both oil and gas; and that the carbon emissions associated with the production of UK gas must be lower than the average of equivalent emissions from imported liquefied natural gas.
Supporting continued production in the UK will also reduce reliance on higher-emission imports – with domestic gas production having around one-quarter of the carbon footprint of imported liquefied natural gas.
The sector is also playing an important role in helping the UK reach the net zero target by drawing on existing supply chains, expertise and key skills – needed for low-carbon industries such as tidal power, offshore wind, and carbon capture and storage.
Supporting continued domestic production will therefore help deliver on the Prime Minister’s priorities to grow the economy while realising the UK’s net zero target in a pragmatic and proportionate way.
While the government is scaling up domestic clean energy sources such as offshore wind and nuclear, the UK still relies on oil and gas for its energy needs. This will continue to be the case over the coming decades, and even after 2050, as data published by the independent Climate Change Committee shows.
