UK Commits to Hundreds of North Sea Licenses To Boost Energy Independence

UK Prime Minister Rishi Sunak commits to future oil and gas licensing rounds as new analysis shows domestic gas production has around one-quarter the carbon footprint of imported liquefied natural gas.

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Hundreds of new oil and gas licenses will be granted for the North Sea as the UK government seeks to increase energy security and reduce dependence on higher-emission imports, Prime Minister Rishi Sunak said on Monday.

Sunak confirmed plans for more than 100 licenses from bids submitted earlier this year to the North Sea Transition Authority (NSTA) and said hundreds of future licenses could also be granted.

“We have all witnessed how Putin has manipulated and weaponized energy, disrupting supply and stalling growth in countries around the world,” he said. “Now more than ever, it’s vital that we bolster our energy security and capitalize on that independence to deliver more affordable, clean energy to British homes and businesses.”

Sunak added that even with the country hitting its target of net-zero emissions by 2050, the country is expected to get more than a quarter of its energy from oil and gas.

The prime minister also announced a pair of carbon capture projects will receive government funding. The Acorn Project in northeast Scotland and the Viking Project in the Humber area would be the UK’s third and fourth carbon capture usage and storage (CCUS) clusters. The two projects join the HyNet Cluster in northwest England and north Wales, and the East Coast Cluster in Teesside and Humber.

“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon-intensive gas imports from overseas—which will support thousands of skilled jobs, unlock further opportunities for green technologies, and grow the economy.”

Sunak said the four clusters will build a new CCUS industry, supporting up to 50,000 jobs in the UK by 2030.

“The UK has one of Europe's largest potential carbon dioxide storage capacities, making the North Sea one of the most attractive business environments for CCUS technology. The government has committed to providing up to £20 billion in funding for the early deployment of CCUS, unlocking private investment and job creation.”

The NSTA, responsible for regulating oil, gas, and carbon storage industries, is reviewing 115 bids across 258 blocks and part blocks from 76 companies it received in its 33rd Offshore Oil and Gas Licensing Round that closed in January. It was the first bid round since 2019 when 104 bids were received across 245 blocks and part blocks.

An analysis released by the NSTA on Monday found that the carbon footprint of domestic gas production is around one-quarter the carbon footprint of imported liquefied natural gas.

“As the UK is a rapidly declining producer of oil and gas, new oil and gas licenses reduce the fall in UK supply to ensure vital energy security, rather than increase it above current levels so that the UK remains on track to meet net zero by 2050,” the report said.

In response to the news, David Whitehouse, chief executive of Offshore Energies UK, said in response that domestic production is the best pathway to net zero, calling the government’s commitment to licenses a “welcome boost for energy security and job.”

“Oil and gas fields decline naturally over time. The UK needs the churn of new licenses to manage production decline in line with the maturing basin,” Whitehouse said. “There are currently 283 active oil and gas fields in the North Sea; by 2030, around 180 will have ceased production due to natural decline. If we do not replace maturing oil and gas fields with new ones, the rate of production will decline much faster than we can replace them with low-carbon alternatives.”

He added that developing the new CCUS industry and its high-value jobs will need significant investment from energy-producing companies.

“This means that the bedrock to success and delivering growth in the economy can only be a collaboration between private and public capital,” he said. “The UK’s skilled offshore workforce, its engineering expertise, and its geology have given our nation a unique opportunity to lead the way in building a net-zero world.”