Rishi Sunak will today announce hundreds of new license for oil and gas in the North Sea, Downing Street has confirmed.
His move was widely speculated yesterday, with No. 10 saying Mr Sunak would pledge: “Scotland will continue to be at the forefront of UK Government plans to strengthen the UK’s long-term energy security.”
This morning they go further, announcing that new domestic oil and gas will not only reduce the UK’s “reliance on hostile states” for energy supply, but aid Britain’s move to net zero.
Downing Street argues that around a quarter of the country’s energy demand will still be met by oil and gas when the UK reaches net zero in 2050, and that domestic production has around 25 percent the carbon footprint of imported liquified natural gas.
The move will create 21,000 new jobs in North East Scotland, while supporting more than 200,000 jobs in oil and gas.
Since 2000, oil output from the North Sea has fallen by 67 percent, from 986,000 barrels to just 320,918 barrels.
The big announcement comes just one month after Labour pledged to end new licences, a policy Net Zero secretary Grant Shapps has warned is “insane” and would plunge Britain into blackouts.
Rishi Sunak argues that, “now more than ever, it’s vital that we bolster our energy security”.
“We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world.
“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home.
“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”
The Government is also announcing that projects in North East Scotland, and the Humber, have been chosen as the third and fourth carbon capture usage and storage clusters in the UK.
Mr Sunsak has also asked Government departments and regulators to work together to find a way to make best use of offshore resources “in a truly integrated way” to unlock carbon capture and hydrogen opportunities in the North Sea.
He has demanded a report by the end of the year.
Mr Sunak will warn that Labour’s proposed ban on North Sea Oil will drive up energy bills, and more reliant on costly imports.
It will be seen as an intensely political announcement, given Labour’s growing strength in Scotland following the collapse of the SNP.
The move also comes amid a wider row about environmental policies, following Sadiq Khan’s ULEZ scheme being seen as a vote winner for the Tories after the Uxbridge by-election.
While the Tories are still committed to Net Zero, there are ongoing discussions about how to protect Brits from the financial impact of certain policies.
In the past Mr Sunak has accused Labour’s anti-oil policy of creating “weakness and dependency” that would benefit “dictators and autocrats”.