U.K. Mulls Energy-Security Exemption for North Sea Climate Rules

(Bloomberg) -- The U.K government is considering changing the rules that govern the award of new permits for North Sea oil and gas fields, taking into account security of energy supply as well as carbon-emissions targets. 

Officials are looking at amending the proposed Climate Compatibility Checkpoints, which would ensure new fossil fuel projects only go ahead if they are in line with the country’s target of achieving net-zero emissions by 2050, said a person familiar with the matter. They could either relax the rules and allow new drilling for geopolitical and national security reasons, or give ministers the power to grant exemptions on those grounds, the person said, asking not to be named because the information isn’t public. 

No final decision has been taken on the matter, the person said.

President Vladimir Putin’s invasion of Ukraine has upended energy markets and prompted an urgent search by European countries to find ways to wean themselves off Russian oil and gas. The U.K. has said it will phase out imports of Russian petroleum this year and is seeking ways to boost domestic production, which is concentrated in the North Sea. 

Oil and gas licenses are usually awarded every year, but no new certificates were handed out in 2020 as the pandemic caused a slump in prices. Exploration on the U.K. continental shelf is already dwindling as resources become scarce and investment is diverted to other parts of the world.  

The British government is still consulting with the public and businesses on the proposed Climate Compatibility Checkpoints, which have already been criticized for not being stringent enough.

In a letter last month, the government’s climate watchdog said the rules shouldn’t only apply to new exploration licenses, but also to existing discoveries that haven’t yet received permits for full development, such as the controversial Cambo field.

As well as expanding domestic oil and gas production, the U.K. government is looking to accelerate the deployment of other energy sources including onshore wind power. Nuclear, which provides low carbon electricity when the wind isn’t blowing or the sun isn’t shining, is also a key part of the country’s strategy. 

Ministers are due to agree this year on a financing deal with Electricite de France SA to build a new large-scale nuclear plant in southeast England. The company is also considering extending the operating life of its Sizewell B station for another 20 years to 2055.

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