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PM Sunak Plans to Authorise Oil Drilling in the North Sea

23 Aug 2023

What is happening?

UK Prime Minister Rishi Sunak announced his plans to grant over 100 licences across the coast of Scotland to undertake oil and gas drilling, and simultaneously unveiled two new locations for Carbon Capture Usage and Storage (CCUS) clusters in North East Scotland and the Humber. The new drilling locations and CCUS clusters are set to be in operation by 2030, the latter supported by up to £20 billion of funding by the government in order to accelerate its production.

Prime Minister Sunak has cited both the need to strengthen British energy security and a desire to decrease British reliance on energy from hostile states, specifically Russia, as his major motivations for the new plans. He has been vocal in arguing that it is better to produce energy on home soil, rather than importing it from foreign countries, as the transportation process would produce “4 times” less carbon emissions. 

The opposition party, Labour, has been quick to condemn Sunak’s decision, however. It has argued that the plans directly contradict Prime Minister Sunak’s pledge to curb Britain’s dependence on fossil fuels last November, when he promised to make the UK a renewable energy superpower just before COP27 commenced. Shadow Energy Secretary Ed Miliband remarked that the plans “will do nothing” for British energy security and will only undermine British climate commitments. 

The announcement has similarly been met with intra-party anger. Tory MP Chris Skidmore has vehemently attacked the plans, stating that the decision has come at “precisely the wrong time” in the midst of global heatwaves, and has said that it will only delay the inevitable energy transition towards renewables. 

What is in it for you?

For our British readers employed in the energy sector, the plans should come as a pleasant surprise: the new licences will continue to support the sector, with ministers suggesting that they will help protect the jobs of up to 50,000 employees. The new CCUS clusters will have a similar effect, with the station at Humber alone expected to create 10,000 jobs. 

Those employed in Scotland will profit most from this, since it is these labourers who are most likely to work at the new sites. It is worth noting, though, that drilling sites will not be in complete operation until 2030. Moreover, The Labour has already announced that it will revoke licences that are yet to be fulfilled should it win at the next general election, which could potentially mean that such job security will not materialise.

Despite Sunak’s claims that the new licences will help foster British energy security and reduce reliance on energy provisions from dictatorships, namely Russia, such contentions are up for debate. The UK government has no control on whether the oil and gas obtained from drilling sites are sold domestically or abroad. According to Campaign group ‘Uplift’, 60% of British gas and 80% of British oil is exported to foreign bidders; this trend is not set to change. The new licences thus do not guarantee a strengthening of Britain’s energy security, and will not be accompanied by any reductions in household energy bills for our readers concerned with cutting costs. 

For our readers concerned with climate sustainability, the long term impact of the licences is uncertain. The actual carbon emissions produced by the drilling will be relatively minor, and despite the new licences, the oil and gas industry in North East Scotland remains in decline. It is true that the plans do not inherently disrupt the objective of achieving net-zero by 2050, by which point Britain will still be dependent on fossil fuels for 25% of its total energy needs. The new CCUS clusters are an exciting prospect, and are expected to remove 30 million tonnes of carbon dioxide from the atmosphere by 2030. Despite this, the plans could still be problematic in the future. 

What happens next?

Nonetheless, CCUS is a nascent technology - it is not in commercial operation in the UK and has yet to be proven at scale. Moreover, the policy shift by Sunak may undermine British climate commitments and discourage other nations from embarking on the energy transition. The major environmental impact of the licences is therefore not necessarily in its immediate effect, but rather the tone it sets for future international climate policy.

The announcement is proof of the emergence of a more stark fragmentation between the Tory and Labour climate policies. Following the surprise Tory victory in the Uxbridge by-election in July 2023, Tory leaders have proposed to delay certain climate targets in a bid to win some short term electoral support. 

What the Prime Minister has not vocalised when discussing his motivations to invigorate North Sea oil drilling is the fact that it will likely win the Tories greater support in the North East of Scotland through the support and creation of new jobs. This new policy represents a continuation of this climate policy divide, one which is surely set to widen in the build-up to the next general election.

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