Thank you for contacting me about the Offshore Petroleum Licensing Bill.
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.
Moreover, the UK receives tens of billions of pounds in tax revenue from the oil and gas sector, and this revenue has been needed to support people with the cost of living and with their energy bills. The Government’s total cost of living package comes to £104 billion over 2022-23 to 2024-25 and was one of the most generous packages in Europe. I understand that revenue from the sector last year alone came to £9 billion.
It is a fact that the UK has cut emissions faster than any other significant economy. The UK 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. Data from 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 seven per cent a year and to fall by nearly 90 per cent 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.
The UK is a world leader in tackling climate change and is the first country in the G20 to halve its emissions. The UK’s renewable electricity capacity has increased fivefold since 2010, with nearly half of our electricity coming from renewables now, up from seven per cent in 2010. The UK has committed to reducing emissions by at least 68 per cent by 2030 from 1990 levels.
In addition, generation from coal, one of the dirtiest of the fossil fuels, has reduced by 95 per cent since 2010, and coal-fired power will be entirely phased out during 2024. This will make the UK the first major economy to be powered without coal.
Thank you again for taking the time to contact me.
Craig Whittaker MP