Energy Bill to unlock 60 million barrels of North Sea oil

The UK government has announced that new transitional energy certificates could unlock approximately 60 million barrels of oil from the North Sea. This measure forms a central part of the Energy Independence Bill, which has now been introduced to parliament. The legislation commits to ending new licences for the exploration of oil and gas fields while simultaneously providing a practical framework for the previously outlined certificate policy. The new certificates are designed to enable further production in areas that have already been explored, specifically by utilising existing infrastructure to support ongoing operations.

According to the Department for Energy Security and Net Zero, these certificates will allow companies to exploit oil and gas on blocks of acreage that are part of, or adjacent to, existing fields linked by a tieback. The department stated that oil and gas will remain part of Britain’s energy mix for decades to come. It emphasised its commitment to a fair transition, which is backed by a two billion pound energy wealth fund and a North Sea jobs service. These measures are intended to support workers and facilitate investment in future industries while maintaining energy security.

The concept of these certificates was originally proposed by Professor John Underhill of Aberdeen University. He advocated for bespoke infrastructure-led permits as an alternative to traditional licensing rounds, arguing that this approach would increase security and reduce emissions. The government’s adoption of this model offers a way to sidestep its stance on new production while still allowing for the development of existing resources. However, an analysis by Westwood suggests that the UK could miss out on 13.4 billion barrels of oil and gas under this specific scheme, highlighting a potential trade-off in the new regulatory framework.

Prime Minister Andy Burnham stated that the changes will bring bills down for good and give families greater security. Energy Secretary Miatta Fahnbulleh described the plans as a first down payment on fixing a broken system, protecting consumers from unfair costs, and putting the public back in control. She added that the Bill aims to build a clean energy future that benefits households and communities, ensuring support reaches those who need it most. The legislation will now undergo first reading before any amendments and eventual royal assent if it is passed.

Stuart Payne, boss of the North Sea Transition Authority, welcomed the news and said the authority is ready to make these changes a reality to support energy production and transition. Other provisions in the Bill include tougher powers for Ofgem to tackle rogue energy companies, the establishment of a warm homes agency, and a requirement for developers to offer a 20 per cent stake in new renewable projects. The Bill also legally entrenches the shift of 75 per cent of domestic renewables obligation costs from energy bills to public spending, protecting savings already delivered to households. Hugo Tagholm of Oceana UK branded the Bill a victory for the ocean, praising the ban on new oil and gas licences as a positive long-term vision that stands up to big oil.