Activists challenge oil and gas authority, role of licensing in addressing climate change, mechanisms of oil industry licenses, debating significance of licensing in regulating oil, understanding scope one, two, and three emissions, urgent need for reform in regulatory system for oil licenses
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Quick takeaways
Oil and gas licensing should prioritize social and environmental risks over economic recovery.
Addressing all scopes of greenhouse gas emissions is crucial in combating climate change.
Deep dives
The Urgency of Addressing Climate Change in Oil and Gas Licensing
Oil and gas licensing has become a crucial battleground in addressing climate change urgency. Activists are challenging regulators, arguing that licenses are being granted without considering the full consequences of extraction on the environment and public good. The need to transition away from fossil fuels is emphasized, and the question of who benefits from oil licenses and how to measure that benefit is raised.
The Role of Licensing in the North Sea Oil Industry
Licensing is a powerful tool used by the UK government to control oil and gas activities in the North Sea. It allows access to resources, imposes obligations, and collects taxes and revenues. However, as the North Sea oil industry matures and faces climate change concerns, the licensing process needs to be reevaluated and updated. The focus should shift from maximizing economic recovery to consider the social and environmental risks associated with continued extraction.
The Impact of Scope 1, 2, and 3 Emissions in Oil and Gas Licensing
Oil and gas licensing is closely tied to greenhouse gas emissions, with scope 1, 2, and 3 emissions playing crucial roles. Scope 1 refers to direct emissions from production activities, while scope 2 covers indirect emissions, often from the purchase of electricity. Scope 3 emissions, which account for the majority of the problem, include the emissions generated by combusting the oil and gas products. Addressing all scopes and reducing life cycle emissions is essential in combating climate change.
The Challenges of Decommissioning and Stranded Liabilities
Decommissioning existing infrastructure in the North Sea, including oil platforms, presents significant challenges and costs. Companies are responsible for decommissioning, but there are concerns about stranded liabilities, where companies could potentially walk away from their responsibilities. Legislation exists to hold companies accountable, but careful consideration of asset trading and ensuring appropriate funds are allocated for decommissioning are critical to preventing environmental and financial risks.
The Government has introduced new legislation requiring annual rounds of oil and gas licensing in the North Sea. What is the relationship between licensing policy and the energy transition?
In the third instalment of the new podcast series from Intelligence Squared, Tides of Transformation: An Oil Story, produced in partnership with the Fraying Ties? project, Gavin Bridge from Durham University and Gisa Weszkalnys from the London School of Economics are joined by Andy Samuel, the former Chief Executive of the North Sea Transition Authority, and Catherine Howarth, the CEO of ShareAction for a conversation about licensing and regulation in the oil sector – how policy has evolved, and where it’s going wrong.
Other contributors include former Chair of the Climate Change Committee Lord Deben; co-founder of Extinction Rebellion Gail Bradbrook; and, Head of Oil, Gas and Mining at Carbon Tracker Initiative Mike Coffin.
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This episode was recorded on September 26 2023, the day before the regulator gave approval to the Norwegian energy giant Equinor to develop Rosebank, the largest untapped oil field in the UK. The implications of, and response to, this decision are discussed further in Episode 4 of Tides of Transformation. Just search ‘Tides of Transformation’ wherever you get your podcasts.
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For more information about Tides of Transformation: An Oil Story, please visit: