Offshore Petroleum Licensing Bill: HL Bill 49 of 2023–24

The Offshore Petroleum Licensing Bill is a government bill. It was announced in the King’s Speech on 7 November 2023 and was introduced to the House of Commons the following day. Its second reading took place on 22 January 2024, and it passed its remaining stages in the House of Commons unamended on 20 February 2024. The bill was introduced in the House of Lords on 21 February 2024 and its second reading is scheduled to take place on 26 March 2024.

The bill would mandate that the oil and gas regulator, the North Sea Transition Authority, hold annual licensing rounds for offshore petroleum production, subject to two tests being met. First, that the carbon intensity of domestic natural gas is lower than the carbon intensity of liquified natural gas imported into the United Kingdom. Second, that the UK is projected to remain a net importer of both oil and gas.

The government has argued that this bill will increase investor confidence in the oil and gas sector and reduce the UK’s dependence on higher-emission imports from overseas. However, the bill was opposed by Labour, the SNP and the Liberal Democrats as it passed through the House of Commons. Opponents of the bill argued that it would not make a difference to the UK’s energy security—given that any additional oil and gas produced as a result of the bill would be traded on international markets—and that expanding oil and gas production was incompatible with the UK’s climate change commitments.