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11 November 2021

Why the UK is not giving up on oil despite its Cop26 climate ambitions

Boris Johnson hails the UK’s green credentials, but is still planning new oil and gas extractions.

By Nick Ferris

UK Prime Minister Boris Johnson insists the world must “move from talk and debate and discussion to concerted, real-world action on coal, cars, cash and trees”. But ending oil and gas extraction are not part of his emission-cutting plans.

A few hundred kilometres north-east of where delegates have gathered for Cop lie the UK’s North Sea oil and gas fields. They contribute to around 10 per cent of the Scottish economy, and make the UK the second-largest producer of oil and gas in Europe, behind Norway, which appears just as reluctant to change tack.

Under a policy known as “Maximising economic recovery”, the government is planning to continue extracting oil and gas for as long as it can. If approved by the UK Oil and Gas Authority, a new oilfield, Cambo, will see 800 million barrels of oil extracted from 2022, over a period of approximately 25 years. 

These plans were brought under the spotlight at Cop26, with the launch on Thursday (11 November) of the Beyond Oil and Gas Alliance, a world-first commitment to end licensing for new oil and gas fields. Initiated by Denmark and Costa Rica, so far six only other territories – France, Greenland, Ireland, Québec, Sweden and Wales – have signed up as full members. Portugal, New Zealand and California have joined as associate members (signalling a partial or temporary ban on new licenses), and Italy has signed up as a “friend”.

“Just as the Stone Age did not end because we ran out of stone, so too will the oil age not end because we will run out of oil,” said Dan Jørgensen, Danish minister for energy and climate change. “It will depend on countries doing the right thing.” 

“The idea is to align countries that have independently decided to wind down oil and gas production, and turn them into a diplomatic force,” said Romain Ioualalen from the NGO Oil Change International. “Twenty-five years of Cops have failed to address oil and gas production head-on, but now we have an initiative that exclusively focuses on it, which will hopefully pressure other countries that wish to be called ‘climate leaders’ to join forces.”

The UK government said in a statement that “while the UK’s reliance on fossil fuels continues to fall, there will continue to be ongoing but diminishing need for oil and gas over the coming years while we ramp up renewable energy capacity”.

Caroline Lucas, the UK’s Green MP, tweeted that “if the UK was really setting a ‘blistering pace’” – referring to something Johnson said in his press conference this morning (11 November) – in the climate negotiations, the UK Prime Minister would “sign” as well. The UK “should not be going ahead with the Cambo oilfield, the equivalent of running 18 coal-fired power stations for a year,” said Ed Miliband, the shadow UK business and energy secretary. 

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The launch of the coalition was celebrated by campaigners, but accelerating the phase-out of oil and gas production is a significant challenge. 

Oil is used in a wide variety of sectors, including industries such as plastics and chemicals, as well as transport. Gas, meanwhile, is the cleanest burning of the three major fossil fuels, and has a reputation as a “transition fuel” between fossil fuels and renewables – despite bodies like the International Energy Agency and the Intergovernmental Panel on Climate Change all warning this is incompatible with net-zero emission targets.

No company featured in an “Oil and gas exit list” – showing the assets of around 900 companies representing nearly 95 per cent of production, published this week by German non-profit Urgewald Foundation – plans to end production. “Everyone is gambling to try and be the last oil and gas producer in the world,” said Nils Bartsch at Urgewald. “BP has a strategy for managed decline. But when you look at the details, you see they are investing in blue hydrogen, which comes from natural gas, and their policy does not include Rosneft [the Russian national oil company] in which they own a 20% stake and which is producing even more hydrocarbons than BP.” BP was approached for a comment by the New Statesman, but the company did not respond.

Oil companies have little diversification in their portfolios and are often state-owned, meaning it is difficult for them to move away from their core business and are protected from external pressures, such as shareholder demands, added Bartsch. 

Nonetheless, Thursday’s announcement is generally viewed as a welcome step by climate campaigners.  “It’s really important to reflect how much of a sea change it has been to hear people talking about ending fossil fuels, which was not mentioned in Paris in 2015,” said Catherine Abreu, executive director of campaigners Destination Zero. “It is massive to finally hear countries say the “F” word: fossil fuels. And also to see the Cop process shift from being negotiation-focused to implementation-focused.”

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