What will the UK push for more North Sea oil and gas really achieve?

The UK plans to issue at least 100 new oil and gas licences in the North Sea in a bid to maximise domestic extraction of fossil fuels.

This was already planned to happen later this year under a licensing round announced in October 2022 by the North Sea Transition Authority, but received  fresh backing on 31 July from prime minister Rishi Sunak during a visit to a gas plant in Aberdeenshire. “This is about strengthening our energy security for the whole of the United Kingdom,” he told the BBC.

The move has sparked alarm among climate scientists and fury from activists, who point to warnings from the International Energy Agency, among others, that new oil and gas development is incompatible with global goals to achieve net-zero emissions by 2050.

But how much damage could the UK government’s pro-fossil fuel stance actually wreak?

In carbon terms, the impact is likely to be relatively small. While 100 new licences might seem like a lot, many of those won’t result in new production, points out Mike Tholen of industry body Offshore Energies UK. “It’s like you are off the starter blocks,” he says. “But not all of those 100 licences… will actually proceed to full development of a new field. A lot die on the way.”

In fact, even with new developments, the UK’s oil and gas industry will remain in a state of managed decline. Industry projections, published in February, show oil production dropping from around 40 million tonnes of oil equivalent in 2023 to less than 10 million tonnes by 2050, while gas production is set to fall from more than 35 million tonnes of oil equivalent to around 2 million tonnes in 2050. Both trajectories include development from future discoveries.

For the UK’s oil and gas industry, “this is generally about making the most of what we have got as we gently fade off the scene”, says Tholen.

The UK is already a net importer of oil and gas, and that is unlikely to change even with a renewed push for North Sea development, says Adam Bell, a former head of energy strategy for the UK government’s energy department who is now at the consultancy Stonehaven.

“My take on this is that new licences don’t really make any difference when the North Sea is running out anyway,” he says. “They [the oil and gas industry] are not going to magically find a new field that makes up for the vast collapse in output the field has seen over the last two decades.”

But the government’s renewed enthusiasm for oil and gas sends a worrying signal internationally, says Bell. With carbon capture and storage still in its infancy – despite news this week that two pilot projects in Scotland and the Humber are on course to be developed by 2030 – pushing forward with new oil and gas is a “challenge to our international credibility” on climate matters, he says.

Climate campaigners are exasperated. They point out the UK is in an ideal position to be among the first countries in the world to turn their back on oil and gas, given the North Sea’s natural decline in reserves, its international status as a small-scale producer and its political influence on climate matters. Clinging to continued, dwindling production instead of seizing the chance to set a world-leading phase-down agenda is the opposite of true climate leadership, they argue.

In isolation, perhaps the news of new oil and gas licences could be overlooked. But set together with news that the UK is winding back plans to make rental homes more energy efficient, wavering on a promise to ban the sale of new petrol and diesel cars by 2030 and likely to miss its pledge to provide £11.6 billion in climate aid, there is a general sense the UK is going soft on climate issues, says Tessa Khan of UK NGO Uplift, which campaigns against new oil and gas development.

Ultimately, that will water down the UK’s influence in key international forums, including the COP28 summit in Dubai later this year.

“The UK is going to have a really hard time maintaining that it has any claim to leadership in terms of climate internationally, if it keeps up these kinds of policy announcements,” says Khan.