The UK government has been considering whether or not to approve the development of a new giant oil and gas project in the North Sea despite warnings by energy economists, climate scientists and other experts that the world can’t afford to invest in any new fossil fuels projects.
Ministers and climate activists are at odds over the Rosebank oilfield. It could produce 500m barrels in its lifetime. Ministers claim that the government is committed to staying within its carbon budget while also ensuring the UK’s energy supply and creating jobs and investments. There are very few clear answers to these questions.
The Climate Change Committee, an independent government-appointed body that advises on climate change, has said that the emissions from drilling in the Rosebank field will surpass the targets for oil and natural gas set by the Climate Change Committee.
The UK does not have to exceed its carbon budgets. These are not set up for each sector. It would also require more drastic cuts in other areas. The CCC said that it was “not clearcut”, whether the UK should be exploring for new oil.
Lord Deben, CCC’s chair, wrote to the Business Secretary last year to say that the committee was unable to determine the global impact of the new North Sea oil-and-gas projects. He said that the UK would continue to import fossil fuels for “the foreseeable future”. This could mean domestic oil and natural gas has an advantage over imported products, as they often have higher carbon footprints.
Ministers must use policies to reduce demand for fossil fuels in order to limit imports. They should also apply “stringent” testing on new domestic production, with “a presumption that exploration is not allowed”, according the spokesman.
The UK is still heavily dependent on fossil fuels. Last year, the UK consumed 61m tonnes oil and 77bn cube metres of gas to meet approximately three quarters of its total energy needs.
The UK has 24 million homes that still use gas boilers to heat water and provide heat, and 32 million vehicles run on diesel or petrol. Gas plants also generate 42% of UK’s electricity.
The reserves of the North Sea are also in rapid decline. North Sea oil production will fall from 90.3m tonnes oil equivalents in 2019 to 46.3m tonnes within five years according to the North Sea Transition Authority.
Mike Tholen, director of Offshore Energies UK (formerly Oil and Gas UK), said that the UK’s production of oil and gas would never rise due to the “natural, long-term decline” in the North Sea. Some new exploration is still needed to prevent the oil and gas industry from slipping into a freefall, which could increase the UK’s dependence on imports as well as deal a major blow to the economy and jobs.
After Russia’s invasion in Ukraine, European governments are more cautious about relying on other countries to supply energy.
The UK has already become a net importer of energy, purchasing gas via pipelines in Norway and continental Europe. It also receives LNG shipments from Qatar or the US. Many import sources pollute more than North Sea oil and gas.
The carbon footprint of LNG shipments is particularly high. It’s more than six-times higher than the North Sea extraction. The carbon footprint of LNG imported from Qatar has been tripled.
Norway is the only exception. Its gas production emits less than other countries, including the UK, due to its strict stance against gas flaring and the use of clean electricity powered rigs. The majority of Norway’s UK gas exports are transported via pipelines, which reduces emissions when compared to condensing cargos, cooling them and shipping them by sea. The main pipeline to the UK is at capacity, and the UK’s largest gasfield has been declining, so an increase in imports would not be possible.
All sides agree that the UK needs to do more to reduce it’s reliance on fossil energy.
The UK government could limit new exploration and production of oil and gas in the North Sea without having to worry about an “energy gap”, or spiraling market prices, by addressing the growing demand.
Experts say that government policies to speed up the deployment of electric vehicles and heating pumps should be matched with ambitious plans to prepare for an explosion in car chargers. It is also necessary to take measures that will improve the energy efficiency in homes and factories by improving insulation.
Government spending would be required to make such changes. The answer may lie in the North Sea. Oil and gas revenues are expected to reach £11bn by 2022-23. This is a sharp increase from the £300m received two years ago.