The Offshore Petroleum Licensing Bill

January 22, 2024 by Extinction Rebellion

Today is the second reading and programme motion in Parliament for the Offshore Petroleum Bill. Members of XRUK, XR Scientists, Fossil Free London and Just Stop Oil will be outside protesting against the passing of this bill. But what is this bill, and why should we care about it?

XRUK’s Political Circle has put together some key points for us to get up to speed with the latest what is what on the Offshore Petroleum Licensing Bill.

First of all, what is this bill about?

The Offshore Petroleum Licensing Bill (OPLB) was introduced in the 2023 King’s Speech as follows:

“Legislation will be introduced to strengthen the United Kingdom’s energy security and reduce reliance on volatile international energy markets and hostile foreign regimes.

This Bill will support the future licensing of new oil and gas fields, helping the country transition to net zero by 2050 without adding undue burdens on households.”

We will explain below why this bill will not strengthen energy security and will certainly not bring down our energy bills.

If passed, the bill would commit the UK to inviting applications every year for new offshore oil and gas production licences in the North Sea. At the moment, licensing rounds are conducted on an irregular ‘as required’ basis.

Key criticisms of the bill

1. Giving out new licences for fossil fuel extraction is incompatible with:
   • The Paris Agreement of keeping global average temperature rise below 1.5C
   • The UK commitment to achieve net-zero by 2050
   • The UK commitment to ‘transition away from fossil fuels in energy systems’ as agreed at COP 28
2. The UK Government claims that the legislation is necessary to strengthen UK energy security.  This is untrue as around 80% of the fuel extracted would be sold on the world market to the highest bidder. The government has admitted this in a written answer to the House of Commons.
3. New oil and gas will not bring down energy bills. Energy Secretary Claire Coutinho has admitted this.
4. Rather than bring down bills, new North Sea oil and gas will drain the UK’s coffers through tax breaks. In May 2021 the Treasury introduced tax relief of 91p in the pound for new oil and gas developments. This tax relief is estimated to amount to £11.4bn in subsidies over five years.
5. The bill is hugely damaging to both our supposed reputation as a global leader on climate change and sends completely the wrong signal about the acceptability of new oil and gas to the rest of the world, just months after it was agreed at COP28 to transition away from fossil fuels.
6. The legislation is widely understood to be politically motivated. After winning a by-election on an anti-clean air, anti-ULEZ campaign the Conservative Party  doubled-down on the idea that weaponising ‘green’ issues as a ‘wedge issue’ could be a vote winner.. The North Sea Transition Authority board agreed at a private meeting that the new mandatory annual licensing process was unnecessary and would make no difference to its attempts to maximise the recovery of UK petroleum. So the bill is purely a piece of political theatre staged as part of the Conservative Party’s election strategy. 

Controversy surrounding this bill

1. Chris Skidmore, the former Energy Minister and member of the Conservative Party, resigned as an MP over this bill. He is the one who signed the UK’s net-zero pledge into law.  In his resignation letter, Skidmore said:

“As the former Energy Minister who signed the UK’s net zero commitment by 2050 into law, I cannot vote for a bill that clearly promotes the production of new oil and gas. While no one is denying that there is a role for existing oil and gas in the transition to net zero, the International Energy Agency, the UNCCC and the Committee on Climate Change have all stated that there must be no new additional oil and gas production on top of what has already been committed, if we are to both reach net zero carbon dioxide emissions by 2050 and keep the chance of limiting temperature rises to 1.5 degrees.

Decisions taken at COP28 last month also set in motion the global transition away from fossil fuels. As the exponential growth of renewable and clean power continues, as we seek to reduce our energy demand for fossil fuels through the adoption of better energy efficiency in buildings and industry, as the adoption of electricity replaces fossil fuels, there is no case to be made for increasing fossil fuel production at a time when investment should be made elsewhere, in the industries and businesses of the future, and not of the past”.

2. Another strong opponent of the bill is former Cabinet Minister and COP26 President Alok Sharma. He has stated that this bill isn’t actually going to change anything – new licences have already been approved. What it does do, however, is make it look to the world like “the UK is rowing back from climate action”. He adds that this bill is “actually the opposite of what we agreed to do internationally, so I won’t be supporting it.”

What are the other political parties saying? 

Labour, the Scottish National Party, the Liberal Democrats and The Green Party all oppose the contents of the bill. Labour have said the bill is “entirely incompatible with the UK’s international climate change commitments and is a totally unnecessary piece of legislation which will do nothing to serve the UK’s national interest.”

What happens next?

If the bill gets voted through today in the House of Commons, it will go to the House of Lords. We believe it is likely that it will face strong opposition there.  Former Environment Minister Zac Goldsmith who now sits in the House of Lords, resigned in protest at the government’s environmental policies a few years ago. A cross-party letter to the government went out to demand withdrawal of the bill..

The Lords will have the opportunity to make amendments to the bill, including ‘the kind of tests that the government sets out for the new licensing rounds’.

Today members of Fossil Free London, XRUK, Just Stop Oil and Sicentist for XR went to Pailaiment Square to protest against this bill. Read the press release.

Photo credit: Adzim Musa, Unsplash