Scotland's First Minister Urges UK Gov't to 'Reassess' Existing Offshore Licenses Citing Climate Emergency

August 12, 2021

Credit: Siccar Point Energy
Credit: Siccar Point Energy

Scotland's First Minister Nicola Sturgeon has sent a letter to the UK Prime Minister Boris Johnson, asking for the UK Government to reassess offshore oil and gas licenses already issued but where field development has not yet started, "in light of the scientific report published by the IPCC this week and the severity of the climate emergency we now face."

The license reassessment would also include the proposed Cambo development off the Shetland, owned by Siccar Point and Shell, over which the environmental groups recently confronted Sturgeon for her failure to block the project.

UK-focused oil and gas company Siccar Point Energy in June made an application for consent to the Oil and Gas Authority for an environmental statement for the Cambo field development which is planned to produce oil and gas via an FPSO for approximately 25 years, with the first oil expected in 2025.

According to Siccar, which acquired the Cambo licenses from OMV in 2017, Cambo is one of the largest undeveloped fields in the UKCS and will open up other prospects for potential development in the area.

Siccar Point is the operator and has 70% interest in Cambo. In April 2018, Shell farmed into licenses P1028 and P1189 and now has 30% interest in Cambo.

Environmental groups have opposed the project citing climate change effects, as well as reports, such as the one from IEA which in May said no new oil, gas, and coal supply projects should be developed if the world wants to reach net-zero emissions by 2050.

In July, Friends of the Earth wrote to PM Johnson calling for him to stop the development of the Cambo oil field.

"The climate impacts of opening this new oil field would be devastating. In the first phase alone, developers want to extract 170 million barrels of oil, the emissions from which are equivalent to running a coal power station for 16 years. That is just the beginning. The field is expected to operate until 2050 – the point by which your government has committed to reaching net-zero emissions," the environmental group said at the time."

"The amount of oil and gas in fields already operating in the UK will exceed our share of emissions in relation to the Paris climate goals. The world cannot afford to open new fossil fuel frontiers," the group said, urging Johnson to block the project and "all new fossil fuel developments."

No 'Business as Usual'

In her letter sent to Johnson on Thursday, Scottish first minister Sturgeon said key decisions on offshore oil and gas licensing, regulation, and policy were reserved to the UK Government. 

"We are both well aware of the importance of oil and gas over many decades - not least in terms of jobs - to the Scottish and UK economies. We also understand that reducing reliance on domestic production of oil and gas, which we must do, without increasing imports - which would potentially increase emissions - depends on the development of alternatives," Sturgeon said.

"However, the answer to these challenges - given the urgency of the climate emergency - cannot be business as usual. Instead, we must take decisions and make investments now to support - and accelerate - the development of these alternatives and thereby secure a just,  but appropriately rapid, transition for the oil and gas industry, and the workers and communities currently reliant on it," she said.

"The North Sea Transition Deal and plans to introduce the Climate Compatibility Check Point for any future licenses are examples of some recent progress towards this goal, but I believe we must go further. Indeed, I am asking that the UK Government now commits to significantly enhancing the climate conditionality associated with offshore oil and gas production. Additionally, however, I am also asking that the UK Government agrees to reassess licenses already issued but where field development has not yet commenced. That would include the proposed Cambo development," Sturgeon said.

"Such licenses - some of them issued many years ago - should be reassessed in light of the severity of the climate emergency we now face, and against a robust Compatibility Checkpoint that is fully aligned with our climate change targets and obligations," she said.

She stressed the importance of the country's skilled oil and gas industry and workforce, but said "we must ensure they, and the existing infrastructure, can help Scotland seize the opportunities of the transition to net-zero - we cannot rest on business as usual in the face of a climate emergency."

Sturgeon said that the knowledge and experience of the oil and gas sector and its supply chain should be harnessed in the development of essential low carbon technologies, such as the production of hydrogen and Carbon Capture Utilisation and Storage (CCUS) – a technology that is seen by experts such as the Climate Change Committee and International Energy Agency as vital to achieving emissions reduction targets. 

"It is essential that we act now to secure the future of the North Sea as a vibrant source of renewable energy generation, hydrogen production, and CCUS," Sturgeon said.

Offshore Engineer has reached out to the Cambo operator Siccar Point Energy, seeking comment on the situation, and on the planned steps in case the project gets blocked by the UK government. The spokesperson said the company wouldn't comment on the [Sturgeon/Johnson] correspondence.

OGUK: Cambo compatible with net-zero

Following Sturgeon's letter, Will Webster Energy Policy Manager of OGUK, an association representing the UK offshore oil and gas industry interests, said: "Our industry is committed to the Scottish and UK net-zero targets. It is good to see both governments recognize our sectors’ contribution to these energy policy objectives."

“Regarding Cambo and other future oil and gas investments, it is already demonstrated in projections by both government and independent agencies that these are compatible with net-zero. This includes meeting residual oil and gas demand and taking account of the emission reductions the sector has already committed to, for example, in the North Sea Transition Deal. Overall such new investment will be more than offset by assets entering decommissioning.

“We have a robust regulatory system, ensuring transparency and challenge that is aligned with net zero, through the legally binding changes made in February 2021 to the Oil and Gas Authority’s responsibilities, and which are already a requirement on the entire industry.

“We appreciate the ongoing support from both governments and the recognition that the changing oil and gas industry and our 50 years of energy expertise is playing an important role in a low carbon, energy secure future, and look forward to continue working constructively with them both going forward.”

'We must consign coal to history'

Worth noting, following IPCC's report released a few days ago, which found the planet had warmed more than previously estimated, and that the world could reach 1.5 degrees warming in the next decades without immediate action, the UK Prime Minister's office issued a statement calling for quick action, and the end of the coal industry, but stopped short of mentioning oil and gas in particular. 

Prime Minister Boris Johnson said of the IPCC report Monday: "Today’s report makes for sobering reading, and it is clear that the next decade is going to be pivotal to securing the future of our planet. We know what must be done to limit global warming – consign coal to history and shift to clean energy sources, protect nature and provide climate finance for countries on the frontline."

"The UK is leading the way, decarbonizing our economy faster than any country in the G20 over the last two decades. I hope today’s IPCC report will be a wake-up call for the world to take action now, before we meet in Glasgow in November for the critical COP26 summit."

Prime Minister Johnson has yet to respond to First Minister Sturgeon's call to review existing offshore oil and gas licenses.

According to a report by Herald Scotland, when pressed about the Cambo project, Johnson last week said that the Cambo contract had been agreed in 2001 "and we can’t just tear up contracts, there is a process to be gone through." 

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