UK Considers Energy-Security Exemption for Offshore E&P Climate Review

After the Russian invasion of Ukraine, the UK may build a national-security exception into its permitting structure for offshore oil and gas in the North Sea, setting climate concerns aside in order to ensure energy security. 

Last year, the UK government determined that continued offshore E&P licensing was consistent with UK climate objectives, so long as the framework for each licensing round incorporates a "climate compatibility checkpoint" to vet each proposal. The checkpoint would consist of a series of tests to determine if the proposed project would be more or less greenhouse gas-intensive relative to its peers, and leases that do not meet checkpoint criteria would not move forward. 

The idea of a passable climate checkpoint for oil is controversial among climate advocates, who insist that offshore oil E&P will have to be reduced in order to meet Paris Agreement targets. The UK's own climate watchdog agency has suggested that the plan's scope is insufficient. 

A recent study by researchers at University College London found that UK North Sea oil and gas production must fall by seven percent annually in order to meet Britain's commitment to a 1.5 degrees C warming limit. This would require halting all new leases at the "checkpoint" and abandoning about 16 billion boe of oil and gas under the seabed.

After the invasion of Ukraine, the "checkpoint" may be revised to allow even more projects through to leasing, even when they do not meet the climate test criteria. Bloomberg reports that the UK government is now considering a "national security" exception that would ease the criteria for new drilling. It could also take the form of a ministerial power to exempt specific projects from the checkpoint rules when needed. The exception is still under consideration and has not been finalized.