UK government to outlaw new North Sea drilling

The UK government has moved to ban any new exploration for oil and gas in the North Sea.

The Energy Independence Bill would remove the North Sea Transition Authority's ability to grant new oil and gas licences.

The legislation will not affect the decision on whether to allow drilling at Rosebank off Shetland - the UK's largest known untapped field - which was approved in 2022 before being subject to legal challenges.

The UK government said it was upholding Labour's 2024 manifesto vow not to issue licences for new oil and gas fields, as well as underpinning its commitment to reducing global warming.

The Conservatives described the bills as "dangerous", accusing Labour ministers of being "totally oblivious the economic and energy threats this country faces".

The Energy Independence Bill, if passed at Westminster, would introduce Transitional Energy Certificates, which would allow existing oil and gas fields to provide additional production from "areas bordering or in close proximity to already licensed fields" or in areas that are already part of an existing field.

The government said the move could produce about 60 million barrels of oil and support hundreds of jobs.

It vowed to sustain "growth and investment across North Sea communities as the energy sector transitions".

The wide-ranging bill would also formally scrap gas standing charges and introduce reforms designed to speed up grid connections.

The UK government has also announced the establishment of an energy wealth fund using tax revenue from oil and gas extraction, with an initial £2bn of funding, to invest in renewable and low carbon energy projects.

Prime Minister Andy Burnham said: "Together, these changes will bring bills down for good, give families greater security and put Britain back in control of its energy future."

Energy Secretary Miatta Fahnbulleh said the bill would help to "build a clean energy future which people feel in their pockets, households and communities, ensuring support reaches those who need it most".

It comes two weeks after the UK government approved production from the Jackdaw gas field in the North Sea.

Ministers said the site, off the coast of Aberdeen, would help heat millions of homes.

Environmental campaigners said the decision would hamper efforts to tackle climate change and make "no meaningful difference" to UK energy security.

Both Jackdaw and Rosebank were approved by the previous Conservative government.

However, after being subject to legal challenges from environmental groups, Labour ministers have had to decide whether to continue with the projects.

Situated 80 miles north-west of Shetland, Rosebank is thought to contain between 300 million to 500 million barrels of oil.

Backers say it would be a vital lifeline to the energy industry in the north east of Scotland, and improve energy security at a time when global supply chains are disrupted by conflict.

Opponents say it would accelerate the climate crisis, slow down the transition to greener energy sources and do little to improve energy security since its produce would largely be exported overseas to be refined.

Greenpeace UK called the bill a "positive step forward for the clean energy transition".

However, it called on the UK government to reject Rosebank.

Amy McCarthy, the campaign group's head of politics, said: "Saying a resounding no to this oil field - a project that would annihilate every single climate or cost-of-living benefit achieved through this bill - must be step one to securing our power and protecting lives."

Aberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick argued that it made "no sense" to wind down North Sea oil and gas production.

"Britain will continue to need oil and gas for decades to come," he added.

"The question is whether we produce more of it here, supporting British jobs, investment and energy security, or pay other countries to produce it for us."

David Whitehouse, chief executive of industry body Offshore Energies UK, said the government was right to target energy affordability, but said it should also prioritise energy security.

"Today, Britain imports more than 40% of the energy it needs, leaving households and businesses exposed in an increasingly volatile world," he said.

"We should be making the most of the energy we produce here at home rather than relying on imports."

Shadow Energy Secretary Andrew Bowie, Tory MP for West Aberdeenshire and Kincardine, called Labour ministers "utterly delusional".

He accused them of being "totally oblivious" to the "economic and energy threats this country faces".

Bowie added: "Might as well hang a closed for business sign over Aberdeen and the North Sea."

Scotland's First Minister has declined to give a definitive position on whether the UK government should grant the go-ahead for Rosebank.

Pressed repeatedly on his position at Holyrood last month, John Swinney told MSPs: "The carbon emissions that come out of the development of an individual site have to be assessed ... as to whether it is compatible with our journey to net zero.

"That is the legal obligation and that is the test and the assessment the United Kingdom government has got to go through."