Hundreds of new North Sea oil and gas licences are to be granted in the UK, the Prime Minister has confirmed today (Monday 31 July), as the British Government continues to back the North Sea oil and gas industry as part of drive to make Great Britain more energy independent.
- Prime Minister commits to future oil and gas licensing rounds, as new analysis shows domestic gas production has around one-quarter the carbon footprint of imported liquified natural gas
- North East Scotland and the Humber chosen as locations for two new carbon capture usage and storage clusters – building a thriving clean industry in the North Sea which could support up to 50,000 jobs
- Investment in the North Sea will continue to unlock new projects, protect jobs, reduce emissions and boost UK energy independence
The Government and the North Sea Transition Authority (NSTA) are today announcing a joint commitment to undertake future licensing rounds, which will continue to be subject to a climate compatibility test.
By adopting a more flexible application process, licences could also be offered near to currently licensed areas – unlocking vital reserves which can be brought online faster due to existing infrastructure and previous relevant assessments.
With the independent Climate Change Committee predicting around a quarter of the UK’s energy demand will still be met by oil and gas when the UK reaches net zero in 2050, the Government is taking steps to slow the rapid decline in domestic production of oil and gas, which will secure our domestic energy supply and reduce reliance on hostile states.
This will increase the UK’s energy security and reduce dependence on higher-emission imports, whilst protecting more than 200,000 jobs in a vital industry as we grow the UK economy. As part of a visit to a critical energy infrastructure site in Aberdeenshire today, the Prime Minister will highlight the central role the region will play in strengthening the UK’s energy independence and meet the next generation of skilled apprentices key to driving this work forward.
The NSTA – responsible for regulating the oil, gas and carbon storage industries – is currently running the 33rd offshore oil and gas licensing round. They expect the first of the new licences to be awarded in the autumn, with the round expected to award over 100 licences in total.
Future licences will be critical to providing energy security options, unlocking carbon capture usage and storage and hydrogen opportunities – building truly integrated offshore energy hubs that make the best use of the established infrastructure.
This comes as new analysis released by the NSTA today shows that the carbon footprint of domestic gas production is around one-quarter of the carbon footprint of imported liquified natural gas. As the UK is a rapidly declining producer of oil and gas, new oil and gas licences reduce the fall in UK supply in order to ensure vital energy security, rather than increase it above current levels – so that the UK remains on track to meet net zero by 2050.
The UK’s oil and gas industry are also vital to driving forward and investing in clean technologies that we need to realise our net zero target, like carbon capture usage and storage, by drawing from the sector’s existing supply chains, expertise and key skills whilst protecting jobs.
Today, the Government has confirmed that projects Acorn in North East Scotland and Viking in the Humber have been chosen as the third and fourth carbon capture usage and storage clusters in the UK.
The Government has already committed to deploy CCUS in two industrial clusters by the mid-2020s – the HyNet cluster in North West England and North Wales, and the East Coast Cluster in the Teesside and Humber – and another further two clusters by 2030 – now confirmed as Acorn and Viking.
Together, these four clusters will build a new thriving carbon capture usage and storage industry, which could support up to 50,000 jobs in the UK by 2030.
The UK has one of the largest potential carbon dioxide storage capacities in Europe, making the North Sea one of the most attractive business environments for CCUS technology. The Government has committed to provide up to £20 billion in funding for early deployment of CCUS, unlocking private investment and job creation.
Commenting, Leo Docherty MP said:
"Today, the Government has announced a new drive to secure UK energy and support families with the cost of living. We have seen how Putin's Russia has manipulated and weaponised energy - disrupting supply, forcing prices to rise, and stalling growth in countries across the globe.
"Now more than ever, it is vital that our country becomes self-reliant and energy independent. Rather than importing oil and gas from abroad, we will get it from here at home, powering Britain from Britain. Even when we reach net zero in 2050, a quarter of our energy needs will still need to come from these fuels."