Sunak Toned Down North Sea Oil, Gas Plans After Legal Advice

(Bloomberg) -- Rishi Sunak watered down proposals to deregulate North Sea oil and gas extraction after UK civil servants warned that policy suggestions from the prime minister’s office would breach international law.

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Ahead of Tuesday’s King’s Speech setting out his legislative agenda, Sunak’s aides asked officials at the Department of Energy Security and Net Zero to work on options to ramp up oil and gas extraction. They included a proposal to remove some of the requirements for environmental assessments, according to people familiar with the matter. Another was to reduce the amount of time given for a public consultation on changes to environmental regulations.

Read more: Sunak Seeks to Trap Labour With King’s Speech Geared to Election

Civil servants responded to the request by warning that a radical deregulation of environmental standards would be a definitive breach of international law, the people said. They also said the UK has legal obligations to dozens of international treaties with environmental requirements.

Though it’s not clear which plan Sunak preferred, a statement late Sunday suggests his office accepted the advice. The government’s decision to mandate annual drilling licenses — one of the options proposed by Sunak’s team — includes tests for whether more extraction would meet the UK’s environmental commitments and support the transition to net zero greenhouse gas emissions.

Downing Street and the Department for Energy Security and Net Zero did not respond to requests for comment.

The fact Sunak’s office was looking at options to deregulate North Sea oil and gas fits with his government’s broader direction of travel since the summer, with ministers trying to present policy choices as protecting voters struggling with the cost of living crisis. It’s an argument that also taps into climate-skeptic sentiment on the right of the governing Conservative Party.

Maximizing North Sea extraction would “help to lower household bills in the long-term,” the government said in the statement.

But that is disputed by industry experts, given North Sea oil and gas resources are mostly tapped out and the sale price is dictated by international markets. Even Energy and Net Zero Secretary Claire Coutinho told the BBC on Monday that the policy wouldn’t “necessarily bring energy bills down.”

As well as potentially violating international law, officials advised Sunak’s office that increasing oil and gas extraction would inevitably increase carbon emissions and would need to be reflected in the legally-binding progress toward net zero, the people said. A 20% increase would lift the UK’s total carbon emissions by about 1% a year, the officials calculated.

A UK government spokesperson said they did not recognize the suggestion that Sunak had toned down his policy on oil and gas extraction. Each new annual licensing round “will only take place if it meets stringent and robust tests” to support the transition to net zero, they added.

Reducing environmental protections would likely lead to challenges in domestic courts, the officials said. They also warned that oil and gas firms would not necessarily welcome an accelerated process if it meant they would face public criticism over environmental concerns. The department’s official advice was that it could not recommend these policies for legal reasons.

The final version of the oil and gas announcement in the King’s Speech will be toned down as a result of the officials’ intervention, the people said.

(Adds UK government spokesman comment in 10th paragraph)

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