OPINION: A row over whether Shell and Siccar Point Energy should be allowed to develop the Cambo oilfield offshore the Shetland Islands highlights the fast-moving climate debate.

And a growing number of environmental organisations are calling for all hydrocarbon licensing in the North Sea to be dropped.

The UK government looks unlikely to accede to either demand in the short term, but it is under growing pressure to curb domestic oil and gas production.

Only in that way can the UK claim to be a real climate leader and show the way to energy transition at the next UN climate talks, COP26, in Glasgow this November, so the critics say.

The Cambo field dispute shows how the climate debate has shifted, as few would have suggested even three years ago that one of the world’s most famous oil basins could be voluntarily shut.

Extreme weather phenomena causing fires in the western US and floods in Germany are igniting stronger calls for urgent action to curb fossil fuels.

Cambo looks set for rocky ride

Operator Siccar Point is pressing forward with plans to reach first oil from Cambo by 2025, but the not-yet-sanctioned scheme looks set for a rocky ride.

The oil company argues Cambo supports the energy transition by maintaining security of supply while ensuring any production platform will be fitted so that all power can come from renewable-generated electric power.

But even the International Energy Agency has questioned the need for new oil or gas output, other than from projects already approved, and it is hard to ignore such calls in a country setting out its stall as a leader on climate action.

This is a far cry from the early days of the North Sea when the Queen and Prime Minister would be rushing up to Aberdeen to celebrate the latest field coming on stream.

Green revolution

These days, Prime Minister Boris Johnson sees COP26 as a chance to celebrate his country’s “green revolution”, most notably the world-leading offshore wind industry.

The UK can boast of being the first country to pass a binding climate change act and has just ramped up its net zero carbon dioxide targets: aiming to cut them 78% from 1990 levels by 2035.

The UK was the first G7 country to set a net zero target, but its climate change committee, which monitors progress, says it will struggle to meet its own ambitions.

Carbon emissions have fallen fast in the UK, but heavily aided by deindustrialisation: letting CO2-heavy manufacturing move to China and elsewhere.

And Johnson has muddied the waters by prevaricating over whether to approve a new open-cast coal mine.

There may be local support for the proposed mine, whose coking coal could help sustain what is left of the UK's steel industry, but it is still difficult to reconcile it with COP26 rhetoric and a decision to end coal-fired electricity generation by 2024.

The UK has also promised to end the sale of petrol and diesel cars by 2030, quadruple offshore wind power by 2030 to 40 gigawatts, boost hydrogen production and pour £200 million ($274 million) more into carbon capture and storage (CCS).

The UK oil industry, typified by BP and Shell, arguably are leading global oil companies into the energy transition and moving decisively into renewable energies, while pushing progress with the latest hydrogen and CCS technologies.

But even BP in its latest annual Review of World Energy questioned how, on the current trajectory, the world would meet its Paris climate agreement goals.

Public money

Johnson’s government has overcome his Conservative Party’s unwillingness to intervene in economic affairs, using massive public spending to tackle the impact of Covid-19 lockdowns.

Further public money is promised for greening the economy, but will it be enough, or will the energy consumer be left to foot the bill, causing a backlash against decarbonisation?

Johnson dreams of being the Winston Churchill of the 21st century, but the rhetoric is still ahead of the reality in the energy sector. Tough decisions lie ahead for Boris — and BP.

(This is an Upstream opinion article.)