OFFSHORE PETROLEUM LICENSING BILL – PRINCIPLES, OR POLITICS?

On 8 January 2024, the UK Parliament will be asked to vote on the Offshore Petroleum Licensing Bill.

This will amend the UK’s Petroleum Act 1998, and require the Oil and Gas Authority, also known as the North Sea Transition Authority, to run an annual process inviting applications for new oil and gas production licences.

This has prompted former Energy Minister Chris Skidmore MP to resign as a Conservative MP, thereby triggering a by-election in his Parliamentary constituency near Bristol. Chris Skidmore as a Minister signed the UK’s Net Zero commitment into law, and in January 2023 published a Net Zero Review with 129 recommendations about how to seize the opportunities of the transition. On the new legislation he commented –

“We cannot expect other countries to phase out fossil fuels when at the same time we continue to issue new licences or to open new oil fields.

It is a tragedy that the UK has been allowed to lose its climate leadership, at a time when our businesses, industries, universities and civil society organisations are providing first class leadership and expertise to so many across the world.”

Sir Alok Sharma MP, who was President of the COP26 climate negotiations, has said that he will not be voting for the new Bill, saying that it is “smoke and mirrors” and a distraction. He points out that UK oil and gas is sold on world markets at world prices, and will not therefore contribute directly to energy security or lower prices for UK consumers. He has questioned how the new Bill can be consistent with the commitment that the UK government signed up to at the COP28 climate talks to “transition away from fossil fuels”. 

It may be that in a likely election year, this legislation has more to do with offering a contrast with Labour party policies on not issuing new oil and gas licences. The fact that the new legislation was published just weeks before the COP28 climate talks concluded is a further instance of the gulf between what governments say, and what they do. For Chris Skidmore MP, the gulf has proved too wide.