Parliament Push Back on Offshore Licensing Bill

The UK's ‘commitment’ to combatting climate change has faced criticism with the recent introduction of the Offshore Petroleum Licensing Bill. Former cabinet minister Sir Alok Sharma, who was heavily involved in the COP26 climate summit, has condemned the bill.

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Sharma labelled it a ‘total distraction’ and claimed that the move sends the wrong message about the Conservative Government's dedication to addressing climate change. In this article, we examine the details of the controversial bill and explore its potential impact on energy prices on British shores.

The Offshore Petroleum Licensing Bill

The proposed legislation aims to guarantee annual oil and gas licensing rounds, a move the Government has argued will strengthen the UK’s energy security. Critics have questioned the validity of this claim, suggesting it's misleading the public.

According to Sharma, the North Sea Transition Authority already has the authority to issue new licences, rendering the new law redundant. He has accused the Government of diverting attention from crucial climate action and doubling down on oil and gas production.

In addition, the Offshore Petroleum Licensing Bill would not necessarily lower domestic energy bills because the prices of oil and gas affect international markets, not just the UK. Furthermore, the Government have no power to stipulate where oil sold by private companies is shipped.

Cross-Party Challenge

A cross-party group of 30 Members of Parliament, including former Business, Energy and Industrial Strategy Minister Chris Skidmore and Conservative peer Lord Goldsmith, has written to Energy Secretary Claire Coutinho. In the letter, the group urged her to abandon the proposed legislation.

Arguing that the bill weakens the country's claim to be a global leader in climate change combat, the letter also suggests that the supply of low-cost renewables and implementing energy-efficient measures would be more effective in bolstering energy security while genuinely lowering consumer bills.

Labour's Stance

The Labour Party has taken a strong position against the Conservative-led government. The opposition has pledged to rule out any new oil or gas licences if they are to triumph in a general election. Party leader Sir Keir Starmer previously dismissed the legislation as a futile attempt by the Conservatives to create a dividing line with their counterparts.

The Government maintains that domestic oil and gas production is essential for energy security, especially as the UK transitions to ‘net zero’. They contend that relying on domestically produced fossil fuels is the lesser of two evils compared to importing them.

Looking Forward

The Offshore Petroleum Licensing Bill has caused controversy, with critics expressing concerns about its impact on the UK's commitment to combatting climate change. As the bill continues to face opposition from all angles, its fate remains uncertain. The need to strike a balance between energy security and meeting climate commitments is at the heart of this debate.

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