The UK's Dilemma on Oil and Gas

At present, I find it difficult to take pride in being British. Since 2012, my sense of national pride has been declining, but recent events have only exacerbated that feeling. The UK government has retreated from numerous climate commitments despite widespread criticism from the public, economists, climate advocates, and even members of the Conservative Party. Unfortunately, new proposals regarding oil and gas licenses could transform Britain into a hub for harmful fossil fuel practices, complicating our path to a genuine net-zero future.

Not long ago, Prime Minister Rishi Sunak announced the issuance of 100 new oil and gas licenses in the North Sea. The rationale behind this decision was to stimulate economic growth by providing citizens with more affordable and reliable energy while also creating job opportunities. However, many—including myself—believe this approach is fundamentally flawed. According to the International Energy Agency (IEA), to achieve our climate targets, we should have ceased the use of unabated fossil fuels by 2021.

The video titled "What Happened To The UK's Oil Wealth? Norway's Opposite" explores the contrasting management of oil resources between the UK and Norway, shedding light on potential lessons for the UK.

The new licenses pose a direct threat to our transition to net-zero and the health of our planet. Numerous studies indicate that renewable energy sources are not only more cost-effective but also better for the economy, generating more high-quality jobs and enhancing energy security compared to oil and gas. Therefore, it appears that Sunak's support for these licenses is primarily to bolster an industry in which his wealthy family has significant investments.

In response to the backlash, the government has attempted to save face by proposing that these licenses be converted to annual contracts rather than fixed periods. Under this new plan, licenses will only be awarded or renewed if companies can meet net-zero targets and ensure that the oil and gas they produce have a lower carbon footprint than imported alternatives.

Section 1.1 The Impracticality of Net-Zero Oil and Gas

This approach raises several concerns, particularly regarding the feasibility of running oil and gas operations under net-zero targets. As I have previously discussed, it is practically and financially unviable to offset emissions from oil and gas extraction. The technologies available for verifiable carbon removal are challenging to scale and expensive, and they are likely to remain so for the foreseeable future. It would require significant investment to establish carbon capture facilities capable of offsetting emissions from oil and gas sourced from the North Sea. This burden would either fall on the companies—impacting their profitability—or on consumers, resulting in higher energy prices and economic strain, or on the government, further worsening our financial deficit.

Subsection 1.1.1 The Risks of Greenwashing

The second issue at hand is greenwashing. Oil and gas companies are unlikely to employ verified carbon offsets to meet net-zero goals, as this would jeopardize their business. Instead, they may resort to less credible methods, such as nature conservation, which have minimal impact on climate improvement. The difficulty in quantifying the carbon captured through such measures has led to exaggerated claims in the industry. In fact, products utilizing these carbon credits cannot legally advertise themselves as net-zero in the UK, as it is classified as greenwashing. This could inadvertently drive an entire sector of the UK economy towards legally sanctioned greenwashing, a significant regression.

Chapter 2 Title: The Economic Case for Renewables

The video "After THE OIL MACHINE: What Norway and the UK can learn from each other" discusses the differing approaches to energy policy in Norway and the UK, highlighting key takeaways for future strategies.

Furthermore, there is an economic argument against the new licensing strategy. Renewables not only create more well-paying jobs but also retain more capital within the UK economy. For instance, Shell, a major player in the UK North Sea oil and gas sector, is a multinational corporation whose profit distribution is heavily skewed towards a small number of shareholders, many of whom are not based in the UK. In contrast, renewable energy companies, which typically operate local solar and wind farms, have a more equitable profit distribution and are generally smaller in scale. Over the past five years, investments in UK renewables have yielded a 75.4% return, compared to a mere 8.8% return for fossil fuel investments.

Fortunately, some politicians recognize these challenges. Labour's shadow energy security secretary, Ed Milliband, has vocally opposed these licensing plans, labeling them a "desperate political strategy" that will not lower energy costs or enhance energy security. He noted that Britain's current reliance on fossil fuels has significantly contributed to the ongoing cost-of-living crisis. With a majority of the public advocating for stronger climate action and feeling the effects of years of austerity, Labour's renewable-focused agenda is likely to gain traction.

In conclusion, the recent licensing proposals reflect the Conservative Party's inclination to align with the fossil fuel industry to maintain influence. This disregard for the future of both Britain and the planet is not only evident but also alarming. If the Tories wish to retain power, they must reevaluate their stance, heed scientific evidence, and implement effective policies rather than these regressive measures that serve only to consolidate their authority. With recent political shifts, there may be an opportunity for change, though skepticism remains.

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(Originally published on PlanetEarthAndBeyond.co)

Sources: BBC, IEA, CNBC, Will Lockett, NREL, Forbes, Imperial, fDi