UK Government to mandate North Sea oil and gas licences

The UK Government have revealed plans to award oil and gas licenses in the North Sea each year.

The new legislation will be set out in the Kings speech on Tuesday and require the North Sea Transition Authority (NSTA) to invite applications for new production license on an annual basis to "safeguard the prosperity of our country".

It's aim is to provide job security for 200,000 workers and to help with the transition to net zero in 2050.

The UK Government said the move would "bolster energy security, reducing reliance on imports from hostile foreign regimes such as Russia" and "leaving us less exposed to unpredictable international forces", which was promised to lower household bills.

Data published by the Climate Change Committee showed the UK will continue to rely on oil and gas to help meet its energy needs even after net zero in 2050.

Renewables generated a record 48.1% of electricity in the first quarter of this year.

The plans have been criticised by opposition parties, with Labour's Ed Miliband claiming it won't bring down energy bills for households.

First Minister Humza Yousaf told journalists during a visit to Dundee the new licences "fly in the face" of the country's climate obligations.

"I haven't seen the detail of their announcement, but what I would say is, from the previous announcements around supporting, for example, 100 new oil and gas licences, to me that flies in the face of our climate obligations as a country," he said.

"We have an existential climate crisis right here, that the entire world is facing.

"We absolutely support the oil and gas industry, we support the jobs.

"We want to accelerate as quickly as we possibly can to that just transition.

"What the UK Government has announced over the past few weeks and months will only slow down that just transition, which won't help the UK and certainly won't help the planet."

Each annual licensing round will only take place if key tests are met that support the transition to net zero, including that the UK must be projected to import more oil and gas from other countries than it produces at home, and that carbon emissions associated with the production of UK gas are lower than the equivalent emissions from imported liquefied natural gas.

If both tests are met, the NSTA will be required to invite applications for new licences annually.

Prime Minister Rishi Sunak said: "I am proud that the UK is a world leader in reducing emissions, and of our new plan to transition to net zero without adding undue burdens on households and securing the country's long-term interest.

"Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources. The clarity and certainty that our new legislation will provide will help get the country on the right path for the future."

Secretary of State for Energy Security and Net Zero Claire Coutinho, said: "The UK has cut its emissions faster than any of its peers.

Jon Butterworth, chief executive of National Gas, said: "Gas is the backbone of our nation's energy system - and it is vital we make the most of the abundant resources we have.

"National Gas are delighted to see the government give their firm backing to the UK's gas sector today, maintaining the security of our energy supply and ensuring we can continue to power the country as we transition towards net zero.

"By backing gas and embracing hydrogen we can create jobs, secure energy independence, deliver net zero, and keep costs down for households and businesses."