UK Giving Away The Store On Oil Since 2015; New Drilling Decision Looms Before COP26
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The UK was the first country to adopt a net zero emissions commitment. But buried in the small print of Britain’s statute books is a clause that explains the proposed Cambo development and explodes our climate credentials: “maximising economic recovery” – a legal obligation for the UK government to maximise the extraction of its offshore oil and gas. As we allegedly lead the charge towards a cleaner, greener future, UK policy remains legally bound to drill every last economically viable drop from the North Sea.
Our obligation to maximise extraction suffuses countless policies, subsidies and tax breaks for the fossil fuel giants. Consider taxes on oil production, for example. In the 2015 and 2016 budgets, then chancellor George Osborne introduced the largest cuts in oil production taxes for a generation with the purpose of “extracting every drop of oil we can.” Petroleum revenue tax, for instance, is now charged at0%.
Companies rushed in to take advantage of the giveaway. As a result, UK production increased every year from 2015 to 2019, reversing the decline of previous years. While Covid-19 reduced production, it is expected to return to growth next year. This is as a direct consequence of government policy: according to official estimates, cumulative UK production from 2016 to 2050 will be nearly 3bn barrels higher than it would have been without the recent government interventions. It is not the declining and struggling industry we are encouraged to imagine.
Perhaps the Johnson administration isn’t solely to blame for policy that it inherited. But chances to do away with it have been squandered. A recent review by industry regulator the Oil and Gas Authority restated its objective of maximising extraction, and in March, the government rejected proposals to join several neighbouring countries in ending licensing of new oil and gas exploration, promising instead just to test future licensing rounds for climate compatibility.
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https://www.theguardian.com/commentisfree/2021/aug/23/britain-commit-net-zero-drill-oil-cop26-boris-johnson-shetland