Oil and gas licence law to shore up supplies

Oil and gas licences that allow drilling in the North Sea will be introduced every year under a new law that Rishi Sunak will unveil in the King’s Speech tomorrow. The North Sea Transition Authority will be required by law to invite applications for new production licences every year under the plans. Claire Coutinho, the Energy Security Secretary, argues in a Daily Telegraph article that the change would provide certainty for the 200,000 workers connected to North Sea oil and gas.

Last winter, Europe was fighting for its energy security on three fronts. Vladimir Putin’s war in Ukraine forced continental Europeans to painfully wean themselves off of Russian oil and gas.

Maintenance delays caused nuclear power production in France to fall to record-lows. Temperatures tumbled to -10C in many parts of the UK and millions of people turned up their heating. These factors, combined with low gas storage on the Continent, sent wholesale energy prices soaring.

Britain stepped up. Not only did the Government cover around half of the typical family’s energy bill, but we also played our part in supporting the energy security of our friends and allies overseas. We became a net electricity exporter to Europe for the first time in more than a decade. We tripled our gas exports to a new record and helped keep the lights on abroad and at home. This winter, we are in a much better place, with energy prices down 55 per cent from their peak. But it is my duty to safeguard Britain’s energy security not just for now but in the long-term too.

We must not be complacent when global risks are rising. The war in Ukraine and instability in the Middle East are warning signals that hostile players can play havoc with our energy supply.

The energy consumption of emerging economies is increasing. The starting gun has been fired on the global race for energy – and we need to keep our economy growing, our country moving and our homes warm. Against this backdrop, it is simply common sense that we make the most of our home-grown gas and oil.

That is my focus. We have increased the amount of power we generate from renewable sources from 7 per cent in 2010 to almost 50 per cent today. We are ramping up offshore wind with the five largest offshore wind farms in the world. We are forging ahead with new nuclear plants, solar and emerging technologies such as fusion energy.

And with record numbers of wind turbines and solar panels coming online, we are reforming the way we plan the electrify grid to make sure we can connect this clean power to towns and villages across the country. But independent Climate Change Committee data show that the UK will need oil and gas for a significant proportion of its energy needs, even as we reach Net Zero in 2050. No one can doubt that we will continue to lead the world on tackling climate change, and using our domestic oil and gas will not hinder our ambitious targets – which remain the highest of our peers.

We face a simple choice. Do we shut down our own oil and gas extraction, foregoing billions in tax revenue and making us more reliant on foreign regimes with dirtier fuels? Or do we continue to extract the domestic reserves sitting under the North Sea, supporting hundreds of thousands of British jobs in the process? Would rather we made the most of our own production, and use those funds to invest in the energy transition?

Labour would turn off the taps without a plan to replace supply – deepening our dependency on high-emission imports and reducing our ability to create growth in the UK.