The UK is exploring the option to ban new offshore oil and gas exploration licenses in what could be a radical move away from fossil fuels and part of the country’s net-zero and green recovery commitments, The Telegraph reported on Saturday.
The UK became in 2019 the first industrialized nation to enshrine the net-zero ambition in a law. The government, as well as industry associations and other stakeholders, support the net-zero plan and call for a green recovery from the COVID-inflicted crisis that has hit the UK offshore oil and gas sector.
The UK, however, needs to strike a balance between net-zero actions and keeping the oil and gas industry in good shape as it supports 270,000 jobs across the UK and is a major contributor to tax revenue.
The UK government has already announced that under its green recovery plan and as part of the net-zero-by-2050 pledge, it would ban the sale of new gasoline and diesel cars from 2030.
Now, according to The Telegraph, UK ministers are considering ending the issuing of licenses in 2040, an immediate temporary pause in license issuing, or no changes in the licensing regime. A decision is expected to be taken soon, an industry source told The Telegraph. The push to shift away from oil and gas is seen as the UK taking global leadership in the net-zero pledges ahead of the COP26 climate summit it will host in Glasgow, Scotland, in November.
A possible ban on new offshore licenses would be a controversial move in Scotland, which is home to many companies and supply chain operators in the oil and gas industry.
“Our review into the oil and gas licensing regime seeks to ensure it remains compatible with our target to reach net zero emissions by 2050,” a spokesman for the UK Department for Business, Energy & Industrial Strategy told The Telegraph.
Responding to the report, Mike Tholen, Sustainability Director at the leading offshore industry organization, OGUK, said in a statement:
“By working together, we can help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment. Any curtailment of activity by licencing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain and increasing energy imports whilst exporting the jobs and skills.”
By Tsvetana Paraskova for Oilprice.com