The UK government will issue "hundreds" of new oil and gas licences for North Sea extraction to secure energy reserves, prompting a fresh wave of concern about Downing Street's commitment to net-zero targets.
This morning oil companies were trading higher. BP was up 0.12%, while British Gas owner Centrica was up 1.3% in morning trading.
"Investment in the North Sea will continue to unlock new projects, protect jobs, reduce emissions and boost UK energy independence," Rishi Sunak's office said in a statement.
It added that "a more flexible application process" would be applied for the licence requests, which would still be subject to a "climate compatability" test for carbon reduction goals.
"The government is taking steps to slow the rapid decline in domestic production of oil and gas, which will secure our domestic energy supply and reduce reliance on hostile states," it said.
Nevertheless, the news has caused an outcry. Speaking to Sky News, Birmingham Yardley MP Jess Phillips said the move was "the wrong priority".
"He [Sunak] should be up there focusing on exactly what needs to be done around renewable energy, and ensuring that we're no longer as a nation reliant on oil and gas, which as we've seen has delivered spiralling bills for everyone in our country," she said.
"This will do absolutely nothing to help bring people's bills down, and it will do nothing to help the raging fires in British Columbia that you just reported on."
Dependency Danger
Moscow's ongoing invasion of Ukraine, launched in February 2022, saw a global surge in energy prices as Western nations imposed sanctions against Moscow, targeting in particular its massive oil and gas exports.
"We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world," Sunak said in the statement, referring to Russian President Vladimir Putin.
"Now more than ever, it's vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy."
A study released Monday by the North Sea Transition Authority said the carbon footprint from domestic UK gas production was one-fourth the footprint from imported liquified natural gas.
It also confirmed plans to build two more carbon capture facilities along the North Sea coast, at Acorn in northeast Scotland and Viking near Humber, England – which are operated by Harbour Energy PLC – alongside two already under construction,
It said the four clusters could support up to 50,000 jobs by 2030.
Business as Usual
UK governments have talked up carbon capture for many years. In 2003 an energy White Paper published under then-prime minister Tony Blair promised an "urgent implementation plan" that would conclude within six months.
Sunak is due to visit an energy infrastructure site in Aberdeenshire today to "highlight the central role the region will play in strengthening the UK's energy independence and meet the next generation of skilled apprentices key to driving this work forward".
Asked beforehand about his transport plans, he said simply:
"I'll be flying as I normally would."
With additional reporting by Ollie Smith, UK Editor, Morningstar
