This week’s King’s Speech included an announcement that oil and gas exploration licences are to be awarded on an annual basis. Johnny Gowdy, director at Regen, explores further.
Whether the industry needs or wants annual licence rounds is not clear. The Government, however, still claims that awarding more exploration licences will help to secure 200,000 oil and gas jobs as well as “reduce reliance on volatile international energy markets and hostile foreign regimes”.
Against the backdrop of the wars in Ukraine and Palestine, and the energy price crisis, this sounds plausible – why wouldn’t we seek to exploit our own energy sources? The reality, however, is that the extra licences will make very little difference to the projected rapid decline in production of North Sea oil and gas and the UK’s increasing fossil fuel import dependency. It will definitely not secure 200,000 jobs in a terminally declining industry.
But while it makes no real difference to the UK’s energy future, Regen director Johnny Gowdy argues that, for the sake of a few headlines and a pre-election booby-trap for Labour, it does risk undermining our position as a climate change leader and distracting industry and policymakers from the real energy security and economic opportunity presented by low-carbon technologies.