Former energy minister Chris Skidmore announced his decision to stand down as a member of the Conservatives in protest of the government’s Offshore Petroleum Licensing Bill.
Skidmore outlined in a statement released last Friday (5 January) that he can “no longer condone nor continue to support a government that is committed to a course of action that I know is wrong and will cause future harm”.
Introduced to the House of Commons on 8 November, the Bill has brought much controversy both from the energy industry and members of parliament. It would place the North Sea Transition Authority (NSTA) under a new duty to run annual applications for new offshore oil and gas licenses.
The government stated that this would make the UK “more energy independent and safeguard domestic energy supplies”.
However, the energy industry in particular cautioned this with Dr Simon Cran-McGreehin, head of analysis at Energy and Climate Intelligence Unit (ECIU) having said that the new licences were a “distraction from policies that would have a real, lasting impact on the UK’s energy independence”.
He also added that “oil from new fields such as Rosebank will be traded internationally – as the government has admitted, this oil is not earmarked for the UK and it won’t make any real difference to UK prices”.
Indeed, it seems this will cause a further headache for the Conservative Party and Prime Minister Rishi Sunak with the country gearing up for a potential general election in 2024 and energy policy expected to be at the heart of many debates. With this in mind, Chris Skidmore’s protest and resignation will send a message to the government on the implications of not supporting the energy transition – especially with the UK having been one of 118 governments to have signed a pledge to triple the world’s renewable energy capacity by 2030 at the recent COP28 summit in December.
This move by the international community was paramount to ensure the globe continues to have a chance in limiting temperatures rises to 1.5 degrees Celsius.
Skidmore referenced COP28 in his resignation statement which read: “Decisions taken at COP28 last month also set in motion the global transition away from fossil fuels. As the exponential growth of renewable and clean power continues, as we seek to reduce our energy demand for fossil fuels through the adoption of better energy efficiency in buildings and industry, as the adoption of electricity replaces fossil fuels, there is no case to be made for increasing fossil fuel production at a time when investment should be made elsewhere, in the industries and businesses of the future, and not the past.”
Government rollback on net zero policies could have dire consequences
It is worth noting that the government’s plan to expand offshore oil and gas licences is in contradiction to Skidmore’s Mission Zero: Independent Review of Net Zero report, released in early 2023, which evaluated the UK’s net zero journey and some recommendations to support the journey.
Despite being well received and emphasising the need for the government to pursue policies that support the energy transition, new oil and gas licencing is a huge blow to all the efforts and recommendations laid out in the publication.
With the government having also revealed a delay on the sale of internal combustion engine (ICE) vehicles from 2030 to 2035 in September 2023, this contradictory policy for the UK’s net zero ambitions could decrease investor confidence in the UK energy transition and thus move private funding to rival markets such as the UK and EU.
This was something that was hinted at by Andrew Forrest, Australian mining tycoon, investor and owner of mining giant Fortescue, in an interview with Bloomberg News in July 2023, when he threatened to pull the plug on investment if the government did not commit to net zero policies.