Drilling in the North Sea must end and the highly skilled workers in the industry moved into the clean energy sector if the UK is to reach its climate commitments, a new report has warned.
According to the report, the Government should end licensing for new oil and gas fields as it could quadruple the nation’s carbon emissions.
The Friends of the Earth research claims that the UK’s 5.7 billion barrels of hydrocarbons in already operating fields will exceed the nation’s share in relation to the 2015 Paris Climate goals.
But the industry and Government aim to extract a further 20 billion barrels and opening new sites would nearly quadruple the emissions, the report argued.
While globally, emissions from already operating fields and coal mines will push the world “far beyond” the 1.5C temperature increase set by the Paris Agreement.
The UK Government plans to complete its 31st licensing round and launch the 32nd this year, in what the report authors say is an effort to encourage more exploration.
If these new reserves are extracted and burned it will help “push the world further beyond climate limits”, or, if they are left in the ground after exploration it will trap the money invested, forcing a “deferred collapse of fossil fuel extraction at the expense of workers and communities”, the report warned.
It also recommended that the UK Government revokes any existing licences for undeveloped sites and phase out all subsidies for gas and oil exploration.
This should be replaced by properly supporting the building of the clean energy industry, mainly using existing skilled workers from the oil industry and potentially also spark a new jobs boom.
Written by Friends of the Earth Scotland, Platform and Oil Change International, the report – titled Sea Change: Climate Emergency, Jobs and Managing the phase-out of UK oil and gas extraction – explained the recent history of Government subsidies towards the industry, including reduced tax rates, tax allowances and funding for decommissioning rigs.
For example, since 1990 the UK Government revenue is “£255 billion lower than if it had the same effective tax rate as Norway” for oil and gas extraction, the report argued.
While in the tax years 2015/16 and 2016/17, the UK Treasury gave “more money to oil companies than it took from them in taxes”, with a tax bill of negative £2 million and negative £350m in each respective tax year.
According to the UK Government, the subsidies it has introduced since 2014 will increase future North Sea extraction by more than 30 per cent. While there has been a reduction in carbon emissions, “almost all” have been due to the closure of coal power and coal-powered industry, the Sea Change report said.
Scotland hit its 42% emission reduction target four years early in 2016, while the UK reduced its emissions by 38% from 1990 to 2017.
However, the report warned the carbon emissions from the anticipated 30% increase are “twice what will be saved over that period by the UK phase-out of coal power”.
Oil and Gas UK has said the industry is offering solutions to lower its carbon impact, such as through carbon capture and storage techniques.
Clean energy investment in the UK fell from £20bn in 2015 to £7.7bn in 2017 and 2018, the report added, citing Bloomberg New Energy Finance.
In 2015 the Government took a series of actions which were seen to damage the sector, such as ending the Renewables Obligation to onshore wind one year earlier than was planned, and removing the Climate Change Levy exemption for renewables.
The report authors argued: “There is no shortage of available capital to invest in expanding renewables; the problem is that it is being invested elsewhere. Policies that make oil and gas investment more attractive conversely make renewable energy investment relatively less attractive.”
The human impact from the phase-out of the oil and gas industry in Scotland is also a significant focus of the Sea Change report with particular emphasis on the devastating effects in Aberdeen and the north-east where the jobs market is dominated by the North Sea.
It is estimated there will be around 100,000 oil and gas jobs in the UK by 2020 and many of these can transfer their skills into the renewable industry.
It argued: “The cost and uncertainty created by the need for an energy transition should not be borne by the workers in affected industries.
“Many communities in the UK have experienced large-scale industrial transformation that was painful and imposed on them.”
Source: The Herald