The UK government’s new Energy Independence Bill passed a first reading in the House of Commons on November 4, the UK parliament website revealed.
According to the site, the bill still needs to pass a second reading, a committee stage, a report stage, and a third reading in the House of Commons, repeat all the above steps in the House of Lords, then pass a consideration of amendments phase before being cleared for royal assent.
The first reading stage is formal and takes place without any debate, the parliament site states, adding that members of parliament will consider the bill at the second reading. The date for second reading has not yet been announced, the site noted.
A statement posted on the UK Department for Energy Security and Net Zero’s (DESNZ) website on Wednesday highlighted that the Energy Independence Bill will end new North Sea oil and gas licenses, introduce Transitional Energy Certificates “to support existing offshore fields throughout their lifetime”, and update the North Sea Transition Authority’s (NSTA) objectives and powers “to better equip the regulator in its role as a steward of the transition”.
The bill will also end new licenses for onshore oil and gas fields in England, including licenses that could be used for shale-gas fracking, according to the statement, which pointed out that the bill will also “update the laws governing consumer protection, support with bills, home upgrades and energy infrastructure”.
DESNZ noted in the statement that the new bill “builds on the Budget by delivering a major overhaul of Britain’s energy system, putting affordability and public control at its heart”.
“The bill will also deliver on the government’s pragmatic approach to the North Sea, by ending new licenses to explore new oil and gas fields while supporting continued production from existing licensed areas,” it added.
“New Transitional Energy Certificates will enable further production in already explored areas, including through existing infrastructure. This could unlock around 60 million barrels of oil and support hundreds of jobs,” it continued.
DESNZ highlighted in its statement that oil and gas “will remain part of Britain’s energy mix for decades to come”, noting that the government “is committed to a fair transition, backed by the GBP 2 billion [$2.6 billion} Energy Wealth Fund and North Sea Jobs Service, supporting workers and investment in the industries of the future”.
Industry Reaction
In a statement sent to Rigzone this week, NSTA Chief Executive Stuart Payne said, “we welcome the introduction of the Energy Independence Bill, and stand ready to get to work – making these important changes a reality that supports energy production and energy transition in the North Sea,” he added.
In another statement sent to Rigzone this week, David Whitehouse, Chief Executive of industry body Offshore Energies UK (OEUK), said, “the government is right to put energy affordability at the heart of this bill, but affordability must go hand in hand with energy security”.
“Today, Britain imports more than 40 percent of the energy it needs, leaving households and businesses exposed in an increasingly volatile world,” he added.
“We should be making the most of the energy we produce here at home rather than relying on imports. That means building out our world-class renewable resources while meeting as much of our continuing demand for oil and gas as possible from our own North Sea,” he continued.
“Around 65 percent of the oil produced from the North Sea ultimately serves the UK market, supporting our energy security as well as British jobs, businesses and supply chains,” he said.
“Energy independence must mean backing our own North Sea, our own industries and our own people. Britain cannot import its way to energy independence,” Whitehouse went on to state.
David Bucknall, CEO of INEOS Energy, said in a separate statement sent to Rigzone this week that “the government’s legislation to ban new drilling in the North Sea would actively decrease energy security in the UK”.
“Leaving existing resources in the ground at home while we import the same resources from abroad makes our energy autonomy a victim of global instability,” he added, noting that Norway, “working the same resource-laden continental shelf, is reopening gas fields that have been shut for decades”.
Bucknall highlighted in his statement that the UK North Sea has “ready infrastructure”.
“The pipelines, platforms, ports, and skilled workforce needed for energy production are already in place,” he said.
“We could use these resources to meet the needs of UK consumers more quickly, cheaply, and securely than bringing energy in from elsewhere, while protecting homes and businesses from the volatility of geopolitical impacts,” he added.
“This legislation chooses campaign promises over the country’s future,” he warned.
In another statement sent to Rigzone this week, UK union Unite outlined that the Energy Independence Bill “does make some small steps in the right direction” but warned that it “will not deliver real energy independence”.
“Unite supports net zero but, under its ‘No Ban without a Plan’ campaign, it argues the UK must not legislate against energy jobs in the North Sea without secure alternative employment in place,” it added.
DESNZ Response
Rigzone contacted DESNZ for comment on OEUK, Ineos, and Unite’s statements. Rigzone also contacted UK onshore oil and gas industry group UKOOG for comment on the Energy Independence Bill.
In response, a DESNZ spokesperson told Rigzone, “we’re delivering our manifesto commitment to end new licenses to explore new North Sea oil and gas fields, while backing existing fields for their lifetime”.
“Oil and gas will remain part of Britain’s energy mix for decades to come,” the spokesperson added in a statement sent to Rigzone.
“Last month, we gave the green light to Jackdaw, an already-licensed gas field that will strengthen our energy security, protect hundreds of jobs and boost domestic gas production by around six percent at its peak,” the spokesperson continued.
DESNZ’s statement noted that the North Sea “has been declining for decades” and highlighted that the UK government’s new Transitional Energy Certificates “will support production linked to existing fields”, while its GBP 2 billion Energy Wealth Fund “will reinvest oil and gas revenues into clean energy industries – protecting jobs today and building Britain’s energy future”.
At the time of writing, UKOOG has not responded to Rigzone.
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