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Why we shouldn’t ‘max out’ oil and gas

Recently, the Prime Minister, Rishi Sunak, has granted 100 licences to oil and gas companies to develop new projects in the North Sea, despite the UK’s commitment to reduce CO2 emissions to net zero by 2050.

In press and TV interviews he has said he wants to ‘max out’ the UK’s oil and gas reserves while at the same time cutting greenhouse gas emissions. His justification for this is that it will give us ‘energy security’ while we move further towards renewable energy over the next thirty years. He also asserted that producing more oil and gas from our North Sea reserves is less polluting and generates fewer emissions than importing it from abroad.

How much faith should we have in these claims?

Can we increase oil and gas production and stay within our climate commitments to reduce our greenhouse gas emissions to net zero by 2050?

The answer to this is NO. In 2021 the International Energy Agency said that there was no room for new oil and gas production anywhere in the world if we are to get to net zero by 2050. (1)

Furthermore, this government’s own review of net zero strategy, led by Conservative MP Chris Skidmore, recommended ending new oil and gas licences. Skidmore described Sunak’s decision as ‘the wrong decision at precisely the wrong time.’ (2)

Significantly, Sunak himself has been unable to explain how our climate targets can be met without ending new oil and gas licences.

Will new oil and gas licences give us energy security?

The answer is also NO, for the following reasons:

There will be no immediate increase in output and no effect on price. Oil and gas from any new projects will not come on stream for another 20 to 30 years, by which time, if we were on track in reducing CO2 emissions by moving to renewable energy, much less oil and gas will be needed. This means that investment in these projects could turn out to be unprofitable for the companies concerned. Of course, this gives them an incentive to try to block or slow down the shift away from oil and gas in the same way tobacco companies tried to impede efforts to get people to quit smoking and save their lives.

Even when it arrives, the oil and gas will not be ours to use since the UK does not own it. It will be sold at market prices to whoever wants to buy it and the profits will go to giant companies such as Shell and BP. Eighty per cent of oil produced from UK reserves in the North Sea is exported. During last year’s energy crisis UK gas exports actually doubled according to the government’s own statistics. (3) Therefore the idea that we can have ‘our own’ oil and gas and use it as we see fit is an illusion – at worst a lie.

Is producing oil and gas from UK North Sea reserves less polluting than importing it?

Oil and gas are imported into Britain in two ways – by pipeline and by ship. Oil comes through pipes or in tanker vessels. Most of our oil (just under half of our total imports) comes from Norway through pipelines. Gas comes through pipes or in super-refrigerated ships as Liquified Natural Gas. It is then ‘regassified’ in the UK and fed into the gas grid. Liquified Natural Gas imports accounted for just under a fifth of our total supply in 2020, coming mainly from the USA and Quatar. However, most of our natural gas imports come by pipeline from Norway and accounted for a little less than a third of our total supply. Domestic production supplied just under half of what we used.

When Sunak spoke about domestic production being less polluting than imports – he said they were 3 to 4 times worse in terms of carbon emissions - he was referring only to the carbon emissions caused by producing, transporting and regassifying imports. However, these emissions are very small compared to those from burning the stuff. Once total emissions including the burning of oil and gas are taken into account, the difference is much smaller. Also, UK gas and oil production is dirtier than that of other North Sea producers Norway and Denmark. A study by Rystad Energy, an independent energy research company, found that UK-produced oil rigs produced 21Kg of CO2 per barrel of oil compared with 8Kg for Norway. (4) Most of our imports then, are produced in less polluting fashion than what we produce ourselves.

The wider consequences of the decision to grant new exploration licences.

All informed observers agree that expanding new oil and gas production is incompatible with the UK meeting its climate commitments agreed at successive international climate summit talks – COP talks. But it doesn’t stop there. Effectively we are reneging on our commitment and this will make it easier for other countries to do the same. We will lose any claim to international leadership on climate change that we may have thought we had when we hosted the COP26 climate summit in 2021. We will be unable to claim any moral authority to challenge countries when they decide to follow us down the blind alley we are choosing for ourselves. Sunak’s decision is a betrayal of us all and especially of our children and grandchildren.



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