Government launches oil and gas transition plan

The UK government has launched a consultation on the design of a new climate compatibility checkpoint for the oil and gas industry.

The scheme, which has been welcomed by the industry follows a commitment earlier this year to introduce the checkpoint as part of the North Sea Transition Deal.

“This landmark deal between industry and government is supporting the UK’s oil and gas sector in the transition to a lower carbon future,” said the Department of Energy in a statement. “An orderly transition is crucial to maintaining the security of the UK’s energy supply, supporting high-value jobs, and safeguarding the expertise necessary to achieve a lower carbon future.”

Under the plan the checkpoint will be a new measure carried out before each future oil and gas licensing process to ensure any new licences are only awarded on the basis that they are aligned with the UK’s climate change commitments, including the UK’s target of reaching net zero by 2050.

The consultation, sets out potential tests that could be used to assess new licenses, including domestic demand for oil and gas, the sector’s projected production levels, the increasing prevalence of clean technologies such as carbon capture and hydrogen generation, and the sector’s continued progress against emissions reduction targets.

Energy and Climate Change Minister Greg Hands said: “This new checkpoint will be key to our plans to support the oil and gas sector during its net zero transition. It helps safeguard the future of this vital UK industry as we create more opportunities for green jobs and investment across the country.”

The announced received support from the industry. Andy Samuel, chief executive of the Oil and Gas Authority (OGA) said: “We welcome the launch of this consultation. Alongside the net zero test the OGA is applying to our decisions such as field developments, these proposals recognise the important role of industry in helping meet the UK’s energy needs while accelerating the energy transition to net zero.”

Using the feedback given from the consultation, the checkpoint will then be established as a new measure to assess potential future licences.

“This checkpoint will ensure any future licences are granted only on the basis that they are compatible with the UK’s climate change objectives. If the evidence suggests that a future licensing round would undermine the UK’s climate goals or ability to reach net zero, it will not go ahead,” added the statement.

The new checkpoint will be an additional layer of scrutiny applied to future licences, on top of the existing measures that already apply to UK oil and gas developments, including the environmental assessment conducted by the Offshore Petroleum Regulator for Environment and Decommission (OPRED), and the net zero impact assessment carried out by the Oil and Gas Authority as part of its consent process for new licences.

“Through the landmark North Sea Transition Deal, the UK was the first G7 country to set out plans to back the oil and gas industry to transform while supporting tens of thousands of jobs. This checkpoint is a key example of how the government is supporting the industry in the transition to a lower carbon future, while also working to achieve the UK’s net zero commitment,” said the Department of Energy.

UK government Minister for Scotland Malcolm Offord said the transition is vital but will be completed over time.

“The UK government fully supports the oil and gas industry in its transition away from fossil fuels to cleaner, greener energy sources, such as wind and tidal power,” he explained. “Until we have sufficient supply in those areas, maintaining a domestic supply of oil and gas – albeit reduced – will be necessary.

“We are working closely with the industry on the North Sea Transition Deal, and we are consulting to ensure this addresses climate concerns while protecting and creating jobs.

“It will all help us accelerate towards a fully green energy sector in line with the Prime Minister’s 10 point plan and our robust 2050 net zero goals.”

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