I have had a number of constituents contact me about the Offshore Petroleum Licensing Bill.
I am aware that this Bill requires the North Sea Transition Authority (NSTA) to run an annual process inviting applications for new production licences in the UK’s offshore waters, subject to key tests being met. These are that the UK is projected to remain a net importer of both oil and gas and that the carbon emissions associated with the production of UK gas must be lower than the average of equivalent emissions from imported liquefied natural gas (LNG).
This Bill enhances the UK’s energy security and reduces dependence on higher emission imports from overseas, including from countries such as Russia. While the Government is scaling up home-grown, clean energy sources such as offshore wind and nuclear, the UK is still reliant on oil and gas for most of our energy needs and there will be continued need over the coming decades.
The UK has cut emissions faster than any other significant economy and has one of the world’s most ambitious 2030 emissions targets. I would like to assure you that the Bill is consistent with meeting net zero by 2050. The Climate Change Committee data shows that the UK will need oil and gas even when it reaches net zero. NSTA analysis shows that domestically produced natural gas is almost four times cleaner than importing LNG. Even with continued development, oil and gas production is expected to decline by 7% a year and to fall by nearly 90% by 2050. This is faster than the average annual global decline needed to align with UN 1.5°C pathways and the UK's carbon budgets.