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UK government to review offshore oil and gas licensing

Image credit: Olav Gjerstad

The UK government has announced that it will review licensing for future offshore oil and gas production as part of its broad effort to reduce emissions to net-zero by 2050.

According to a government-issued statement, the review will ensure that the government is informed when planning for future oil and gas production in the UK in a way which is aligned with its climate targets. Initial findings from the review will be published in the upcoming Energy White Paper.

Oil and natural gas trade group the Oil & Gas UK association welcomed the review. The group is aiming to cut its own operational carbon emissions to net-zero by 2050.

The review comes as the Oil and Gas Authority announced the outcomes of the latest (32nd) licensing round for North Sea exploration, which was delayed. The authority is currently reviewing its strategy to assist industry in helping meet the UK’s legally-binding decarbonisation goals, with licenses awarded in this round expected to be “stewarded” under this strategy.

While oil and natural gas account for a minority of the UK’s electricity, they are still required for many domestic and industrial processes such as heating, cooking, transport and the manufacturing of medicines, plastics and household appliances. The government believes it is unlikely that this will change substantially over the coming decades and the independent Committee on Climate Change has acknowledged that demand for these fossil fuels will not be entirely extinguished.

France, meanwhile, has pledged to phase out all oil and gas production by 2040 in line with almost-identical national decarbonisation targets.

“Over half of our electricity now comes from low-carbon sources, power from coal is at an all-time low and we have more installed offshore wind capacity than any other country in the world,” said Alok Sharma, business and energy secretary. “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 as we move toward net zero carbon emissions by 2050.

“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.”

Meanwhile, there are plans for the upcoming North Sea Transition Deal to be published within this Parliament. This will lay out details of how the government intends to balance exploitation of North Sea resources with its transition to a net-zero carbon economy by 2050.

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