UK Mulls Ban on Oil, Gas Exploration Licences: Update

(Updates with comment from the UK's Department for Business, Energy and Industrial Strategy)

The UK government is considering a ban on the issue of new oil and gas exploration licences, The Sunday Telegraph reported on March 14, citing sources.

The UK is hosting the 2021 United Nations Climate Change Conference (Cop26) in Glasgow in November. "We are going to still need oil and gas in this country," one source told the newspaper. "There is a lot of excitement around Cop26 and the imperative to be seen to do the right thing."

Industry association OGUK responded to the report saying the ban could undermine the UK's efforts towards becoming carbon neutral by 2050. OGUK sustainability director Mike Tholen noted that the North Sea was one of the first sectors to commit to becoming a net-zero industry by 2050, while also pledging to halve its emissions within the next decade.

"By working together, we can help deliver the energy transition, providing the oil and gas the UK will need for decades to come while cutting the impact on the environment," Tholen 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."

The UK oil and gas sector is "leading the way" in developing green technologies such as hydrogen and CO₂ storage, he said. "Achieving this through UK companies will require significant investment and we continue to work constructively with government to show this industry has the essential expertise and commitment to ensure delivery."

The UK's Department for Business, Energy and Industrial Strategy (Beis) has not confirmed or denied that the ban is under consideration.

"Our review into the future of the oil and gas licensing regime seeks to ensure it remains compatible with our target to reach net zero emissions by 2050. This commitment also forms part of the Energy White Paper published in December," Beis said in an emailed statement to NGW. "We will agree a transformational North Sea Transition Deal with industry in the coming months to create jobs, retain skills and deliver new business and trade opportunities to support the sector’s transition to a lower carbon future."

Ireland took the opportunity of the 2019 UN Climate Action Summit to announce a ban on the issue of new oil licences. A ban on gas licences was announced the following year. Denmark too has declared it will not hold any more licensing rounds, in order to deliver on its climate goals.