UK jobs and companies would “pay the price” if ministers agreed a ban on new North Sea exploration, according to a senior industry source.
This weekend, the Telegraph reported that UK ministers are considering such a move ahead of the COP26 climate conference coming to Glasgow in November.
Energy Voice understands that the government is unlikely to impose an exploration ban, despite the report stating legislators were “close” to a decision.
The article, coming as the government is undertaking a review of licensing rules for oil and gas exploration, has left members of the sector “scratching their heads”, according to a senior source who wished to remain anonymous.
They said: “The Saudis didn’t get to where they are by closing down domestic industries, yet we’re being expected to do the same with green tech by cutting off investment to the companies that need it most.
“We’d be shooting ourselves in the foot.
“We fully committed to showing global leadership, we’ve set out a plan and we’re in action. After all this work we’re now talking about taking the easy route to just offshoring emissions to other countries.
“It feels like virtue signalling and it’s British jobs and companies who will pay the price.”
“Bordering on reckless”
On Sunday, the newspaper reported that a North Sea exploration ban was “on the table”, with unnamed sources citing a decision as being “close”.
Mike Tholen, sustainability director at Oil and Gas UK, said: “Any curtailment of activity by licensing constraints risks impeding the UK’s ability to deliver a net-zero future, damaging our domestic supply chain and increasing energy imports whilst exporting the jobs and skills.”
Mr Tholen added that the sector is “leading the way” on green tech including hydrogen and carbon capture and storage (CCS), which it has “essential expertise” to deliver.
Aberdeen South MP Stephen Flynn said: “To float a ban on exploration without having announced an Energy Transition Deal, nor even mentioned how much money they intend to invest in its delivery, is bordering on reckless.
“(It) risks undermining the hard work of those who are working so hard to deliver the transition we all want to see”.
In a response to Energy Voice, the UK Department for Business, Energy and Industrial Strategy (BEIS), highlighted that the sector supports 270,000 jobs UK-wide.
BEIS also pointed to the independent Committee on Climate Change having recognised the role of oil and gas for the UK reaching net zero by 2050, including it in all scenarios.
A spokesperson said the licensing review “seeks to ensure it remains compatible” with the net zero target, adding that a North Sea Transition Deal will be signed in coming months “to create jobs, retain skills and deliver new business and trade opportunities”.
“Leave no-one behind”
The Scottish Government said it has not been included in the review to date, adding that it is committed to ensuring a just transition that “leaves no-one behind”.
A spokesperson added that the sector is an “important player” in ensuring security of energy supply for Scotland, and that the sector’s expertise will be used for development of key low-carbon technologies, such as carbon capture and storage (CCS).
They added: “We have not been involved in that review to date, but would expect to be involved meaningfully given the review’s significance to future energy supplies, and in order to ensure a just transition for the more than 100,000 Scots who work in Scotland’s oil and gas sector, as both Scotland and the UK move towards net-zero.”