Oil and gas licensing decision ‘kicking the can down the road’ until world not looking, warns IPPR
Think tank says any further licensing is incompatible with UK’s climate leadership ambitions, in response to North Sea Transition Deal
The Institute for Public Policy Research think tank has responded to the government's announcement of a North Sea Transition deal and urged it to go further by adopting a more collaborative approach with the Scottish government and offering more support for workers.
Luke Murphy, head of the IPPR Environmental Justice Commission, said:
"It is welcome that the UK government says it recognises that future oil and gas licensing must be compatible with net zero, but it is deliberately kicking the can down the road by not making a final decision on oil and gas licensing until after COP 26 – when the eyes of the world have moved on.
"There is no such thing as a low-carbon barrel of oil. The most effective way to reduce emissions is by phasing it out.
"The evidence is already overwhelming that any further licensing of North Sea oil and gas is incompatible with the UK’s and Scotland’s domestic and international climate commitments. If the government ‘s proposed 'Climate Compatibility Checkpoint' were a meaningful test it would almost certainly mean an end to new licenses.
“If the government is determined on this course, then the 'checkpoint' should be legally binding, determined by an independent body and in line with overall net zero targets and the Paris Agreement.”
Joshua Emden, research fellow at IPPR, said:
“Phasing out oil and gas will pose huge challenges for communities around Aberdeen and across Scotland. That’s why any deal should be a partnership between the UK and Scottish governments to manage the transition, alongside local communities and workers in the industry. Disappointingly this 'deal' fails to do that - with no apparent involvement of the Scottish Government at all.
"Despite recognising the need for a transition for the oil and gas sector, the actual support announced for existing workers is dismal. The commitment to local employment for new jobs in low-carbon sectors is voluntary and thus easily disposable in future.
"Nor is there explicit funding or new policies to give workers the access and, crucially, the time they will need to train and retrain. In short, this looks like a missed opportunity to set out a transition deal that works for the people affected and for the planet."
Luke Murphy and Josh Emden are available for interview
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NOTES TO EDITORS
1. The IPPR paper, Net Zero North Sea: A managed transition for oil and gas in Scotland and the UK after Covid-19, by Josh Emden, Luke Murphy and Russell Gunson is available at: http://www.ippr.org/research/publications/net-zero-north-sea
2. Among the report’s 27 recommendations are that the two governments should jointly:
- Set clear five-year targets to reduce oil and gas production, consumption and export, in line with overall net-zero targets and the Paris agreement. At present 80 per cent of UK oil and 20 per cent of gas is exported.
- Remove or amend the law requiring companies to extract the most oil and gas they can from the North Sea- known as “maximum economic recovery” - and instead cap how much they can extract. This should be used to prevent the UK from exporting surplus oil and gas that would generate carbon emissions abroad.
- Reform CEOs’ duties to include environmental obligations, with fully transparent reporting and pay and bonuses linked to long-term environmentally sustainable activity.
- The UK government should close the investment gap of around £30 billion a year in this parliament in zero-carbon and climate-compatible industries, to meet its net-zero commitment, secure a just transition and restore nature. Further investment is needed in decommissioning, offshore wind, energy efficiency retrofitting, sustainable transport, hydrogen fuel and carbon capture and storage (CCS) plants.
- Work with local councils in oil and gas regions to invest in new infrastructure projects like the pilot Acorn hydrogen and CCS project in north-east Scotland, expanded ports to service offshore activity and better broadband and transport links. Investment should also aim to develop low-carbon clusters of industry, such as in Grangemouth and Teesside, and to expanding academia and technical colleges to support them.
- Set up skills academies for existing workers at an annual cost of £40m in Scotland and £63m in England, to develop the new skills needed for some of the developing industries.
- Create a Low Carbon Wealth Fund for Aberdeen and wider Aberdeenshire, as part of the Aberdeen City Deal, to support low-carbon projects tailored to local needs and opportunities.
3. The cross-party IPPR Environmental Justice Commission was created in 2019 with the aim of working with people across the UK to develop policies and ideas that will tackle the climate crisis and restore nature as quickly and fairly as possible. The commission is co-chaired by Hilary Benn MP, Laura Sandys and Caroline Lucas MP, leading politicians from the Labour, Conservative and Green Parties. Find out more here: https://www.ippr.org/environment-and-justice
4. IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence.www.ippr.org