LONDON — Britain’s government has presented its Offshore Petroleum Licensing Bill to parliament.
Under the proposed legislation, the North Sea Transition Authority will stage annual oil and gas licensing rounds over UK waters, subject to new emissions and imports tests.
According to the government, introducing regular licensing for exploration should provide increased certainty for the industry, improving investor confidence and potentially make the UK more energy independent.
The provisos are that UK continues to be projected to remain a net importer of oil and gas, and that the carbon emissions associated with production of UK gas must be lower than the average emissions from imported LNG.
At the same time, continued production from the UK Continental Shelf should also reduce reliance on higher-emission imports, with domestic gas production having about one-quarter of the carbon footprint of imported LNG, the government claimed.
At present, the oil and gas industry supports about 200,000 jobs in the UK and provides £16 billion annually to the economy, with producers expected to pay about £50 billion in tax over the next five years.
And the sector is helping the government meet its net-zero target through supporting the supply chain and expertise needed for low-carbon industries such as tidal power, offshore wind, and carbon capture and storage.
Secretary of State for Energy Security and Net Zero Claire Coutinho said, "The UK has cut its emissions faster than any of its peers. But as the independent Climate Change Committee acknowledges we will need oil and gas even after we reach net zero in 2050. As energy markets become more unstable, it’s just common sense to make the most of our own home-grown advantages and use the oil, gas, wind and hydrogen on our doorstep in the North Sea. Rather than importing dirtier fuels from abroad, we want to give industry the certainty to invest in jobs here and unlock billions of pounds for our own transition to clean energy."