The UK government’s independent climate advisers have said ending North Sea oil and gas exploration would send “a clear signal” that the nation is “really serious” about playing a leading role in limiting the most dangerous effects of global temperature increases.
The Climate Change Committee (CCC) has written to Business & Energy Secretary Kwasi Kwarteng outlining its views on government proposals to introduce a so-called “climate compatibility checkpoint” to ensure new oil and gas licensing is in line with the UK's legally binding objectives to become a carbon neutral economy by 2050.
The CCC believes the proposed checkpoint tests as they stand are “too narrow” and have “limitations”, in part because they cover only new licences and not fields already licensed but not yet sanctioned or consented for development.
It said it would support a "presumption against exploration" and tighter limits on oil and gas production with more stringent tests throughout the development and production lifecycle of projects.
However, the CCC stopped short of calling for an end to exploration, noting that ministers making final decisions would also have to consider impacts on security of supply and energy affordability, which are outside the CCC’s remit.
It also conceded that while halting exploration would help limit global greenhouse emissions it was impossible to calculate exactly how much.
The government has proposed a series of tests it would apply in considering new licensing, including taking into account domestic oil and gas demand, the oil and gas sector’s projected production levels, the increasing prevalence of clean technologies such as carbon capture and hydrogen generation, and the sector’s continued progress against emissions reduction targets.
Responses to a public consultation on the proposals must be submitted by the end of the month.
CCC chief executive Chris Stark said the body also “wanted to bust the myth” that bringing on stream more domestic production was the answer to the recent spike in gas and oil prices.
“I'm afraid that's naive," he said. "Our message for those who are advocating a new oil and gas bonanza in the UK is that it will take too long to ramp up.
“It will have almost no impact whatsoever on the price paid by consumers for oil and gas internationally.”
Stark added: “The very best way to shelter ourselves from the kind of price volatility that we are now seeing is to pursue net zero.”
Making the UK more energy efficient and generating its electricity through “cheap renewables with a bit of nuclear” would be a “winning strategy for the climate” and a “very good strategy for energy security going forward”.
Stark said: “We think an end to UK exploration now is credible, it would send a clear signal that the UK is committed to 1.5 degrees Celsius, just as we said in COP26.
“But, and there is a but, we cannot ignore what's happening around us now.
“We're in the midst of a crisis at the moment that is having a bearing on global energy prices and energy security," he said, referring to fears of a Russian invasion of Ukraine and recent spikes in global energy prices.
“These are issues that are quite rightly beyond the remit of the CCC, so we acknowledge the importance of those considerations in this letter," he said.
The group also acknowledged the economic benefits that come from domestic oil and gas production, including tax revenues and employment.
“We recognise that it's the right for ministers to make consideration of them next to the climate impacts.”
Stark told journalists there was currently a “huge danger of global oversupply of oil and gas”, with current production plans in excess of what is needed to meet the Paris Agreement objectives of limiting temperature increases to 1.5C.
“We do see a need for some control to be exercised over global supply of oil and gas,” he said, adding this was one reason the CCC welcomed the idea of a climate checkpoint.
Stark repeated earlier CCC criticism of the UK North Sea oil and gas industry and the Oil & Gas Authority, the North Sea regulator, for not going far enough in setting targets to cut operational production emissions.
The CCC has calculated the sector could aim for a 68% reduction in operational emissions by 2030, which is greater than the 50% target contained in the North Sea Transition Deal signed between industry and government in March 2021.
Stark argued that not only was this 50% target not far reaching enough, but the industry was not making enough progress to reach it, despite industry claims to the contrary.
In its letter, the CCC acknowledged that UK North Sea production has a lower carbon footprint than many sources of fossil fuel imports, particularly of liquefied natural gas.
But increasing UK production would inevitably result in “growing” the global market for fossil fuels, which would have an impact on the climate.
“Ultimately, we couldn't give an unequivocal view on the impacts of new UK production on emissions, but we can express ongoing disappointment about the commitment of the oil and gas sector to reduce its own emissions in the UK,” he said.
“We feel the North Sea sector and its regulator the OGA is missing the opportunity to cut production emissions even further. And that, I'm afraid, rather undermines the case that they should do more production.”
A day earlier, UK Energy Minister Greg Hands said the government will offer new oil and gas licences in the future.
Hands told the International Energy Week conference the North Sea sector has a “good, solid future” within the context of the energy transition.
After a review, the UK government concluded in March last year that continued licensing for oil and gas was not "inherently incompatible" with the nation's climate objectives but it was acknowledged that this may not always be the case in future.
It was reported in UK media recently that six new North Sea oil and gas projects could win fast-track approval this year amid fears about the economic impact of making the UK a net-zero economy by 2050.
The right-leaning Telegraph daily cited Whitehall sources as saying that Chancellor of the Exchequer Rishi Sunak has been urging Kwarteng to give the go-ahead to the developments as some Cabinet ministers started to “push back” against “insane demands” for the UK to go further in becoming a net-zero emitter by mid-century.
But the UK oil and gas sector has also come under intense pressure and scrutiny from environmental groups in the last year.
High-profile protests in the run-up to COP26 in Glasgow in November led to Shell abandoning plans to participate in the Cambo development in the west of Shetland region, operated by Siccar Point Energy.
Rosie Rogers, head of oil and gas transition for Greenpeace UK, said: “Anyone who’s read this advice [from the CCC] and thinks the North Sea’s future lies in oil and gas is utterly deluded, because it will take decades and won’t ease energy bills.
“What we need to tackle bills and climate change is home insulation, heat pumps, electric vehicles and renewable power. And while this letter is addressed to the Business Secretary Kwasi Kwarteng, Chancellor Rishi Sunak needs to take on board this evidence-based analysis, stop hoping to resurrect a declining fossil fuel industry, and instead support the real solutions to the energy crisis as we approach the Spring Statement.
“The future of the North Sea is in renewables. Our economy, our energy security and our climate depends on it.”
(*This article was published before Russian launched an invasion of neighbouring Ukraine on Thursday.)