Rishi Sunak confirms controversial new North Sea oil and gas licensing

The SNP said the plan was “a final Westminster raid on Scotland’s hydrocarbon resources”. 

Mr Sunak’s legislative programme will be heavily about political messaging ahead of the general election, with many of the proposals intended to create a dividing line with Labour.

Home Secretary Suella Braverman has already hinted at new powers for the police and councils to clear tents used by rough-sleepers which are deemed a “nuisance”. 

She wrote on Twitter/X: “We cannot allow our streets to be taken over by rows of tents occupied by people, many of them from abroad, living on the streets as a lifestyle choice.”

The founder of the Big Issue, Lord John Bird, yesterday called for “grown-up thinking” on homelessness, not treating it as a “law and order offence”.

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Mr Sunak, who diluted a series of environmental pledges in September after the Tories won the Uxbridge by-election by opposing an anti-pollution measure, must hold an election by the end of January 2025, with next October seen as the most likely date.

The King’s Speech, which will be the first delivered by King Charles III as monarch, is seen as a key moment in the long campaign to polling day as Mr Sunak's tries to dent Labour's lead.

It was reported last month that the Prime Minister intended to announce a Bill on oil and gas exploration even though fresh legislation may not be legally necessary.

Last night, Mr Sunak confirmed the Government intended to “mandate annual oil and gas licensing to bolster UK’s energy security and reduce dependence on imports from overseas”.

He said it would help secure 200,000 jobs and £16billion in annual tax receipts, with the licensing rounds contingent on specific tests to advance the transition to net zero.

Billed as “pragmatic, proportionate and realistic”, the new system would require the North Sea Transition Authority (NSTA) to invite applications for new production licences on an annual basis.

The Government said the change would provide certainty to investors and industry and reduce the UK’s vulnerability to imports from hostile states such as Russia. 

A more robust energy mix would also “help to lower household bills in the long-term”, it said, although North Sea oil and gas is sold on international markets, not a discount in the UK.

The licensing rounds would only take place if the UK was forecast to import more oil and gas from it produced at home, and if the carbon emissions associated with the production of UK gas were lower than the equivalent emissions from imported liquefied natural gas.

If both tests are met, the NSTA would invite applications for new licences annually.

Mr Sunak said: “I am proud that the UK is a world leader in reducing emissions, and of our new plan to transition to net zero without adding undue burdens on households and securing the country’s long-term interest.

“Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources.

"The clarity and certainty that our new legislation will provide will help get the country on the right path for the future.”

Data published by the Climate Change Committee showed the UK will continue to rely on oil and gas to help meet its energy needs even after net zero in 2050.

Production from new gas and oil fields in the North Sea can be much cleaner than older ones, and it is tipped to help unlock green investment and development of technologies including hydrogen.

Renewables generated a record 48.1% of electricity in the first quarter of this year.

SNP MP Dave Doogan, his party’s energy spokesperson at Westminster, said: "If the UK showed as much investment in the energies of the future as they do for oil and gas, we would be much further along the energy transition.

"The UK Treasury has raked in more than £400billion from Scotland's natural resources. 

“It's high-time the Tories gave back as it is becoming increasingly clear that our energy rich country is being failed by Westminster governments far removed from the needs of the Scottish people, our economy, and our net-zero future.

"Only with the full control over energy can we chart our own course to green growth and net-zero because the reality is Scotland has the energy, we just need the power."

The Scottish Greens addded: "The Tories want us to believe that we can avoid climate catastrophe by doing exactly the same thing that's causing the climate catastrophe.

"But all this will achieve is more storms, more wildfires, more droughts, more lives lost, and more billions spent mitigating the damage.

“No matter how they try to dress it up, the simple scientific fact is that licencing more oil and gas fields are a disaster for our environment and a betrayal of future generations."

But North East Tory MSP Douglas Lumsden said: “Mandating licencing and making use of our domestic supplies will help to secure vital jobs for the industry and reduces our reliance on imports that would otherwise come at a far higher carbon cost.

“Rishi Sunak’s support is in stark contrast to the SNP and Labour’s opposition to new oil and gas and their determination to pull the plug on the sector at a cost of tens of thousands of Scottish jobs.

“As we have seen with the approval of oil fields such as Rosebank, the UK Government is fully backing the North East and will not abandon an industry which has such a pivotal role in our economic future.”

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Offshore Energies UK CEO David Whitehouse said: “The UK needs new licences to manage production decline in line with our maturing basin.

"A predictable licensing process with transparent checks will support the highly skilled people working in the sector, while ensuring the granting of new licences is compatible with energy security and net zero.”

Jon Butterworth, chief executive of National Gas, added: “Gas is the backbone of our nation’s energy system – and it is vital we make the most of the abundant resources we have.

“By backing gas and embracing hydrogen we can create jobs, secure energy independence, deliver net zero, and keep costs down for households and businesses.”