According to documents obtained through freedom of information requests, the Minister of Energy and Climate, Graham Stuart, inquired BP about the necessary incentives to optimize the extraction of oil and gas from the North Sea.

Stuart met with Louise Kingham, the UK boss of the corporation, last year, shortly after BP revealed a record profit of $28 billion in 2022. They also increased dividends to shareholders and changed their goal to reduce carbon emissions by 2030. At the same time, households were facing steep energy bills. BP is set to release its earnings report for 2023 on Tuesday.

Stuart sought guidance from Kingham on how to successfully argue that UK oil production is beneficial and contributes to the net zero transition. Despite this, experts have consistently disproved the notion that new oil and gas production can improve UK energy security or decrease prices.

Last Wednesday, the UK oil and gas organization approved 24 additional drilling permits to BP and other firms. This follows 27 permits granted in October, with more expected in the upcoming months. The head of the UK’s official advisors on climate expressed concerns in January that these new licenses are not aligned with climate objectives. The International Energy Agency also stated in 2021 that any new ventures in fossil fuels would hinder efforts to achieve net zero emissions by 2050.

Chris Garrard, from the organization Culture Unstained, which conducted the FoI request, stated that the act of drilling for new oil in the North Sea will go against the UK’s climate goals and will not guarantee energy stability. Despite this, the minister asked for BP’s assistance in trying to prove the contrary, showing a clear lack of sincerity.

“The most concerning aspect of this situation is that even after BP had reported record profits, the speaker implies that they were still incentivizing and financially supporting the continued use of polluting fossil fuels, while the general public struggled to afford their energy expenses,” he stated.

The documents made available consist of a heavily censored summary of a discussion between Stuart and Kingham on February 17, 2023. Stuart inquired: “How do you assess the current state of our incentives to optimize recovery from the North Sea and continue advocating for producing it in the UK as a beneficial aspect of the net zero transition, in order to reduce our imports?”

He stated that the money is available and suggested creating incentives and structures to facilitate its flow.

Stuart inquired with Kingham for data to support the case for increased production in the North Sea: “If we don’t utilize our own oil and gas reserves, we will end up spending that money elsewhere. Can you provide a figure that shows the potential cost of relying on foreign imports?”

Significant portions of Kingham’s statements have been blacked out, with officials stating that the information is confidential for commercial reasons. However, she expressed the belief that strategic consideration should be given to the location of tax benefits or incentives, as they play a crucial role in attracting investment. She further noted that BP takes pride in its work and the employment opportunities it generates, as well as its commitment to producing cleaner barrels. She acknowledged that this perspective may be amplified through social media and advertisements.

Tessa Khan from the organization Uplift expressed disapproval of BP’s request for additional tax breaks and subsidies from the government. This request comes at a time when energy bills are contributing to a cost of living crisis and BP has just reported a profit of $28 billion.

“It is truly outrageous that the minister would claim ‘the money is there’ for oil companies to make a profit, while simultaneously cutting off crucial support for millions of struggling households who cannot even afford to heat their homes,” she stated. “There is no doubt about which side this government is favoring.”

A representative from the government stated that Minister Stuart’s support for domestic oil and gas is well-founded, as the UK will continue to rely on these resources even after reaching net zero in 2050. This support is beneficial for our energy security, providing employment for up to 200,000 people and generating £400 billion in tax revenue over the past 50 years. This revenue has been utilized to assist families with living expenses and fund public services. The £6 billion collected through the energy profits levy on oil and gas producers alone aided in covering approximately half of a typical household’s energy bill last winter.

The minister stated that they will persist in holding meetings with energy companies to promote investment in the UK and reduce dependence on expensive foreign imports of liquefied natural gas, which have higher emissions.

A representative from BP stated: “BP is a large company based in the UK and has intentions to make substantial investments in the country’s energy systems and shift towards renewable sources. As a result, we frequently meet with government departments. This particular meeting centered on strategies for the UK to retain its appeal for investments and sustain momentum following the US Inflation Reduction Act, in both traditional oil and gas industries and in environmentally friendly and low carbon initiatives.” The act provides support for renewable energy.

Since 2015, UK government support has provided £80 billion to fossil fuel companies. The majority of the 24 newly granted drilling licenses were given to foreign businesses. Recently, it was disclosed that a company owned by a prominent donor to the Conservative party, who had previously been penalized for unauthorized flaring, was given one of the drilling licenses.

In January, Chris Skidmore, a previous member of the Conservative Party and energy minister, stepped down from his position as a Member of Parliament in opposition to the party’s pursuit of fossil fuels. He described the policy as a “disaster” that is “incorrect and will have negative consequences in the future”.

Source: theguardian.com