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Government Denies Offshore Petroleum Licensing Bill Is "Smoke And Mirrors"

The Bill could allow applications for new offshore oil and gas production licences in the North Sea (Alamy)

5 min read

The government has defended its Offshore Petroleum Licensing Bill in the face of ardent opposition from some of its own MPs and peers, in the latest row exposing divisions within the Conservative Party.

MPs will get their first chance to vote on the government’s controversial Offshore Petroleum Licensing Bill on Monday. If passed, the Bill initiates an annual process inviting applications for new offshore oil and gas production licences in the North Sea.

Some senior Conservative figures have already expressed their intention to rebel, with a few of them among 30 cross-party MPs and peers who wrote to the energy security secretary over the weekend asking her "in the strongest possible terms to withdraw" the Bill, calling it a “piece of political theatre”.

However, a large-scale rebellion is not expected in the chamber, with most Conservative MPs – who form a large majority in the Commons – likely to back the government.

The legislation triggered former Energy Minister Chris Skidmore to announce his imminent resignation as a Conservative MP, publishing a statement on Friday in which he said the “future will judge harshly” those who vote through the legislation in Parliament.

Former COP26 President and Conservative MP Alok Sharma told BBC Radio 4 on Monday morning that he would also not vote for the Bill and that the legislation was "smoke and mirrors".

“As it is currently drafted, this bill is a total distraction… it is a smoke and mirrors bill which, frankly, changes nothing," he said.

“What this Bill does do is reinforce that unfortunate perception about the UK rowing back from climate action.

“We saw this last autumn with the chopping and changing of some policies and actually not being serious about our international commitments. Just a few weeks ago at COP28 the UK government signed up to transition away from fossil fuels. This Bill is actually about doubling down on new oil and gas licences, it is actually the opposite of what we agreed to do internationally, so I won’t be supporting it.”

Downing Street has vehemently opposed Sharma's "smoke and mirrors" assessment of the Bill. 

"We need oil and gas for decades to come, even when we reach net zero in 2050," a No.10 spokesperson said.

"The government believes it is common sense to make the most of what we can produce here rather than shipping in fuels from foreign regimes."

They added that the public would "expect" consumption of oil and gas to continue to decrease in the future, and that the government had set out "very clear commitments on our path to net zero".

However, Sam Hall, Director of the Conservative Environment Network (CEN), told PoliticsHome on Monday that he believed the legislation would not be particularly useful in ensuring the UK’s energy security as it aims for net zero by 2050.

“We will need oil and gas during the transition to net zero, albeit in shrinking amounts, and domestic production can support skilled jobs while clean energy scales up,” he said.

“But given North Sea reserves are in terminal decline, even with new licences, and given the price volatility of international fossil fuel markets, the energy security and long-term economic benefits of this legislation shouldn’t be overstated.”

He said that the priority should instead be to “rapidly reduce our demand for oil and gas” by building more renewables and insulating more homes in order to reduce gas imports.

The CEN director added that the government should introduce tax breaks to encourage more homeowners and landlords to improve their properties’ energy efficiency.

Skidmore, who had previously rebelled on multiple votes concerning net zero and the UK’s environmental commitments, told PoliticsHome in December that he wanted to see the Bill “kicked into the long grass”. He said that decisions taken at COP28 demonstrated the need for an “end date” for world usage of fossil fuels, which he argued the Offshore Petroleum Gas Bill was “totally against”.

Describing this as “another historic mistake and a grave error” by the UK government, Skidmore said that despite commitments made at COP, the UK has been “unable to demonstrate climate leadership as it has in the past”.

He said that this year he wanted to be "more competitive and up the pace of advocating and trying to demystify and sell net zero”.

"It is championing what I think is the right thing to do, but also championing something that I think benefits local communities... Obviously that will mean me coming up against my own government but I am equally determined to make sure that I make the case cross-party as best possible,” he said.

Skidmore had already announced he would not be seeking re-election at the next general election as his seat will be abolished by the boundary review.

Labour, the SNP, and the Lib Dems have put down amendments that essentially oppose the contents of the legislation. Labour’s amendment says it “is entirely incompatible with the UK’s international climate change commitments and is a totally unnecessary piece of legislation which will do nothing to serve the UK’s national interest”.

If it passes the Commons, the Bill will progress to the House of Lords where it could face further opposition, including from former Environment Minister Zac Goldsmith, who like Skidmore, resigned in protest at the government’s environmental policies. Goldsmith signed the cross-party letter which called on the government to withdraw the legislation.

Passage through the Lords could provide some opportunity for amendments on the kind of tests that the government sets out for the new licensing rounds.

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