A cross-party group of MPs have urged the government to stop licencing new North Sea oil and gas projects “well before 2050” in a new report, as well as banning the 'flaring' of excess gas and publishing a league table of the worst emitters.
Suggesting the UK should follow the likes of France, Denmark and Ireland in introducing measures, the Environmental Audit Committee urged the government to set out a plan.
The committee called for calling for the Government to “set a clear date for ending new oil and gas licensing rounds in the North Sea,” the committee said, adding it should be “well before 2050”.
The MPs also called for faster action from the oil and gas sector to reduce operational emissions, saying targets currently set under the North Sea transition deal are “not stretching enough” and that “more rapid action will be required to reduce production emissions by 68%” in line with the government's commitments under the Paris agreement on climate change.
Under the next North Sea licencing round, the committee said the licensing authority should insist on the electrification of all new oil and gas projects, ban routine 'flaring' of excess gas and publish a league table of the best and worst performing companies.
Denmark cancelled all future licencing rounds for oil and gas exploration in 2020 and aims to stop all production of the fuels in the Danish North Sea by 2050.
North Sea fossil fuel companies, including major players Shell PLC (LSE:SHEL, NYSE:SHEL), BP PLC (LSE:BP.), Total Energies SE and Exxon Mobil Corporation (NYSE:XOM), currently face a windfall tax of 35% in the UK, meaning they face total rates of 75%.
Firms are able to effectively gain a 91% tax break by investing in new infrastructure and developments, however.
Some firms have still chosen to reduce spending on North Sea projects due to the tax, including Harbour Energy PLC (LSE:HBR) and Exxon Mobil, while Shell warned it could see reduced investment in the sector.
Suggesting the UK could afford to start restricting new projects, the committee added: “There is a strong argument for faster production decline and halting new investment in oil and gas fields,” given the UK’s “comparatively little economic dependence on the sector”.