UK Government Plans Annual North Sea Oil and Gas Licensing to Support Transition to Net Zero

New law requires North Sea Transition Authority to invite annual applications for oil and gas production licenses, but only if UK production is greener than imports and the nation projects to import more oil and gas than it produces domestically.

A new law to be unveiled by Rishi Sunak, UK's Prime Minister, will mandate annual oil and gas licensing rounds in the North Sea. The North Sea Transition Authority (NSTA) will be required to invite applications for new production licenses each year, in an attempt to support the country's transition to net-zero emissions.
The annual licensing will proceed only if the UK projects to import more oil and gas than it produces domestically and if the carbon emissions associated with the production of UK gas are lower than those from imported liquefied natural gas. These criteria form part of the government's climate compatibility checkpoint.
The government expects the move to support 200,000 jobs, reduce dependence on imports, and provide certainty for the industry during the green transition. However, Labour has called the legislation a 'stunt', highlighting that there is already regular oil and gas licensing.
Critics argue the move is not enough to attract investment in the North Sea and will only make the UK more dependent on unreliable and expensive foreign supplies. They suggest that incentives such as tax breaks should be offered to encourage investment in the sector.
The Prime Minister emphasises that domestic energy will be crucial in the transition to net zero. Despite criticism from environmental campaigners, the government maintains that oil and gas extraction will be a necessary part of the energy mix until at least 2050.