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    UK to consider net-zero goals in future oil, gas licensing

Summary

All future licences will need to align with the UK climate goals, the government said.

by: Daniel Graeber

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Complimentary, Natural Gas & LNG News, Europe, Energy Transition, Political, Licensing rounds, News By Country, United Kingdom

UK to consider net-zero goals in future oil, gas licensing

 The UK government said December 20 it was opening up a “climate compatibility checkpoint” for consultation as it works on the design of any new oil and gas licensing rounds.

“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 government’s statement read.

The government in September 2020 called for a review of oil and gas licensing to determine if they were consistent with national climate objectives.

The consultation for a new model calls for potential tests to determine if future licenses are compatible with those goals.

“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,” the government said.

The checkpoint announcement follows a decision from Shell to pull out of the Cambo oilfield west of the Shetland Islands.

Cambo is one of the largest fields on the UK continental shelf, with its first phase targeting 175mn barrels of recoverable oil along with 53.5bn ft3 (1.5bn m3) of gas. But Shell, which farmed into the project operated by Siccar Point Energy in 2018, said it was withdrawing because of poor economics.

UK prime minister Boris Johnson has expressed guarded support for the project, though Scottish first minister Nicola Sturgeon has urged UK authorities not to give Cambo the greenlight.

The government stressed in its checkpoint announcement that the move away from oil and natural gas will take decades and moving over to cleaner forms of energy will not take place overnight. The consultation period runs until February 28, 2022.