New UK oil and gas licences in North Sea face legal challenge

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UK regulators on Friday fired the starting gun on a new round of licences enabling companies to explore for oil and gas in the North Sea, as climate campaigners signalled they would aim to mount a legal challenge.

The North Sea Transition Authority is expected to award more than 100 permits to companies by the end of June, as the government seeks to bolster Britain’s self-sufficiency in energy following Russia’s invasion of Ukraine, partly by extracting more fossil fuels from the North Sea.

But environmental group Greenpeace claimed the new licensing round was potentially “unlawful” and indicated it would aim to mount a legal challenge.

Climate campaigners have said the government’s efforts to secure more oil and gas from the North Sea conflicts with its commitment for the UK to have net zero carbon emissions by 2050.

In its new licensing round, the NSTA is prioritising four areas in the southern part of the North Sea, where gas has already been discovered. Business secretary Jacob Rees-Mogg said the licences would boost “both [the UK’s] energy security and our economy”.

Licensing rounds used to be a near annual event. But a pause was introduced after the last round in 2019-20 as the government promised to design a “climate compatibility check” to ensure that the award of new permits was “consistent with the UK’s wider climate objectives”.

Bar chart of Supply mix in 2021 showing How the UK relies on gas imports

The check was published last month but criticised as “meaningless” by climate groups as it is advisory only and does not bind ministers to a particular outcome.

Philip Evans, energy transition campaigner for Greenpeace UK, said new oil and gas licences would not lower energy bills for struggling families “this winter or any winter soon nor provide energy security in the medium term”.

“New licences — and more importantly more fossil fuels — solve neither of those problems but will make the climate crisis even worse,” he added. “They are possibly unlawful and we will be carefully examining opportunities to take action.”

The NSTA declined to comment on Greenpeace’s claims. When asked about the potential for legal challenges last week, Andy Samuel, the NSTA’s outgoing chief executive, said: “We make sure that everything we do within the NSTA is done to a very high standard.”

The licensing round has also attracted criticism because of the length of time it can take for any oil and gas discovery to reach production. The average is five years, according to the NSTA, although it hopes the fast-tracked licences could yield results in as little as 12 to 18 months from the time of their award.

Samuel said last week that given the “unusual” situation facing western Europe after Russia in August cut off gas exports via the Nord Stream 1 pipeline, it was right to do “anything we can do to bolster domestic production”. But he also admitted new licensing rounds would not change Britain’s overall dependence on imports.

Last year UK oil and gas accounted for only 39 per cent of the country’s overall supply mix, according to a government assessment.

Pipeline imports from Norway, the Netherlands and Belgium accounted for 44 per cent of the mix, with liquefied natural gas shipped from destinations including the US, Qatar and Russia making up the remainder.

The UK government is seeking to strike long-term gas contracts with countries including Norway and Qatar.

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