You are using an older browser version. Please use a supported version for the best MSN experience.

Six North Sea oil and gas fields to be fired up amid Cabinet row over net zero

The Telegraph logo The Telegraph 07/02/2022 Tony Diver , Ben Riley-Smith
Ministers have pledged to continue to support oil and gas production while renewable energy sources are developed - Andy Buchanan/AFP © Andy Buchanan/AFP Ministers have pledged to continue to support oil and gas production while renewable energy sources are developed - Andy Buchanan/AFP

Six North Sea oil and gas fields are set to be given the green light this year, The Telegraph has learnt, as Cabinet figures push back against “insane” demands to go further on net zero.

Rishi Sunak has asked Kwasi Kwarteng, the Business Secretary, to fast-track the licences amid Treasury fears over the economic impact of making the UK a net zero carbon emitter by 2050.

It is the latest sign of  tensions between Number 10 and Number 11 after the Treasury held back plans for bringing down NHS backlogs and demanded better value for money.

The Telegraph understands that Mr Sunak is also preparing to resist Boris Johnson’s high-spending instincts over public sector pay, measures to limit migrant Channel crossings and the scrapping of free Covid tests.

On Monday, the Prime Minister moved to play down suggestions of a rift with Mr Sunak – seen as a future Tory leadership contender – by responding “absolutely not” when asked whether he has doubts about the Chancellor’s loyalty.

He said: “Everybody in Number 10 and the Treasury are working together in harmony to deal with the big problems that the country faces and clearing the Covid backlogs.”

Replay Video

The six oil and gas areas, which have already been given a preliminary licence by ministers, are expected to be given approval by Britain’s oil and gas regulator to begin construction of rigs in the North Sea.

Despite calls for all domestic fossil fuel extraction to be halted, ministers have pledged to continue to support oil and gas production while renewable energy sources are developed.

Drilling of oil and gas could begin in the Rosebank field, to the west of Shetland, and at the Jackdaw, Marigold, Brodick and Catcher sites in the central North Sea. A sixth site, Tolmount East, had been intended to be approved by the Oil and Gas Authority last year but is now expected in 2022.

The combined reserves of all six sites are thought to be enough to power the whole UK for six months, with 62 million tonnes of oil equivalent fuel in the ground.

A Whitehall source told The Telegraph: “The Business Secretary is pushing for more investment into the North Sea while we transition – not just for jobs and tax revenue, but for domestic energy security.

“Kwasi is actively resisting insane calls from Labour and the eco-lobby to turn off UK production. Doing so would trash energy security, kill off 200,000 jobs, and we would only end up importing more from foreign countries with dubious records.

“Over the long term, we need to generate more secure, affordable, low carbon power in the UK to achieve greater energy independence. The more clean power we generate in the UK, the less exposed consumers will be to gas prices set by international markets.”

For much of the last year, Mr Johnson and Mr Sunak have privately tussled over the scale of public spending, with the Prime Minister more eager than the Chancellor to approve extra money.

With Mr Johnson weakened politically by a rebellion by some Tory MPs to oust him as leader, Mr Sunak is expected to be more robust in his opposition to new spending in the coming weeks.

Senior government sources who have seen the pair interact up close are predicting that Mr Sunak will take a tough line on spending when it comes to public sector pay settlements and policies to tackle the surge of migrant boats crossing the Channel.

The Chancellor is also expected to push to scrap mass free Covid testing by the end of next month, when the Government is set to publish a “living with Covid” strategy.

The installation of Steve Barclay, the former Chief Secretary to the Treasury under Mr Sunak, as Mr Johnson’s chief of staff could help the Chancellor in his drive to curb the Prime Minister’s instinct to approve more spending.

Mr Johnson has pledged that the UK will reach net zero by 2050, meaning that carbon emissions will be reduced to as close to zero as possible and remaining emissions will be absorbed by carbon “sinks” like forests or captured from the air by new technology.

But renewable energy sources, many of which are reliant on sunny or windy weather, are not yet well developed enough to provide the country’s power alone, while most homes are only equipped with gas-powered heating systems.

Since 2004, the UK has been a net importer of fuels and buys around half its gas from Norway, or from other countries, in liquid form.

Several Cabinet ministers believe the pace of net zero is too fast, and that the UK must continue exploring its domestic fossil fuel reserves to prevent it becoming over-reliant on foreign imports. Although Britain imports little of its gas from Russia, the global market price is increasing amid tensions on the border with Ukraine.

Ministers’ continued belief in the fossil fuel industry will raise eyebrows in some quarters after the UK’s hosting of the Cop26 climate conference in Glasgow last year.

Labour has proposed a windfall tax on North Sea oil and gas producers to pay for a rebate for consumers amid rising energy bills.

Sign up to the Front Page newsletter for free: Your essential guide to the day's agenda from The Telegraph - direct to your inbox seven days a week.

AdChoices
AdChoices

More from The Telegraph

image beaconimage beaconimage beacon