UK Moves To Ban New North Sea Oil & Gas Licenses Permanently
Via City AM,
The UK government will introduce legislation banning new North Sea oil and gas exploration licences as part of its Energy Independence Bill.
Critics argue the policy will increase Britain’s reliance on imported fossil fuels while damaging Scotland’s oil and gas industry.
Rising oil prices and disruptions tied to the Iran conflict have intensified political pressure on Labour to reconsider the ban.
The government will make it illegal to grant new oil and gas licences in the North Sea, the King said at the state opening of Parliament, in a sign ministers are refusing to buckle in the face of a barrage of criticism that the policy is depriving the UK of billions of pounds in tax receipts without helping the environment.
As part of an Energy Independence Bill announced in the King’s Speech, the government will bake into law its pre-election pledge not to explore new oil and gas fields in a bid to “take control of our energy security”.
In its 2024 manifesto, the Labour Party made a ban on all new exploration and drilling licences in the North Sea a key pillar of its promise to turn Britain into a “clean energy superpower” by 2030.
But since entering government, the party has come under growing pressure to renege on the promise, with critics arguing it strangles one of Scotland’s most vibrant industries and fails to improve the UK’s environmental footprint.
Backlash against ‘deluded’ North Sea policy
Oil and gas still accounts for three-quarters of the UK’s energy mix. And the majority of those fossil fuels are now shipped in from abroad, meaning other economies benefit from the job creation and tax receipts that are derived from the lucrative drilling and refining processes.
Calls for the ministers to rethink the ban have grown louder since the outbreak of war in Iran led the price of crude oil to nearly double in a month.
Last week, Norway, which drills for oil in the same area of the North Sea as Britain, approved plans to reopen three gasfields that had been shut for decades to help sate the global demand for fossil fuels caused by the closure of the Strait of Hormuz shipping lane.
Two of Labour’s main political opponents – Reform UK and the Conservatives – have both vowed to overturn the ban, in a move they say would help increase the UK’s tax take and inoculate it from any acute supply shocks.
The ban, which the government claims will help Britain off the “roller-coaster of fossil fuel markets”, has also drawn criticism from the US’s ambassador to the UK, who has used multiple interviews to urge Britain to make more of its reserves.
Shadow energy secretary Claire Coutinho accused her opposite number Ed Miliband of being “utterly deluded” for seeking to put the ban into the statute book.
“He is not making us more independent. He is making us more reliant on foreign imports,” she said.