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Home›OECD›UK has given oil and gas industry £ 13.6bn in subsidies since Paris Agreement, activists say

UK has given oil and gas industry £ 13.6bn in subsidies since Paris Agreement, activists say

By Christopher Scheffler
November 25, 2021
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Campaigners suing the government over plans to expand UK fossil fuel production have said oil and gas companies have benefited £ 13.6bn from the UK government since signing of the Paris Agreement in 2015.

Based on a new analysis of data from the Organization for Economic Co-operation and Development (OECD), the research points out that between 2016 and 2020, companies received £ 9.9 billion in tax breaks for new oil and gas exploration and production, and £ 3.7 billion. in payments for dismantling costs.

Activists suggested that these payments and tax breaks amounted to subsidizing the production of fossil fuels.

These financial incentives for UK oil and gas companies are at the center of a court case to be heard by the High Court on December 8-9.

Campaigners, from the environmental group Paid to Pollute, argue that this is neither economical for the UK as a whole and also conflicts with the country’s legal obligation to achieve net zero emissions by 2050.

Three environmental activists are defying the British government, arguing that the current way the state oil and gas authority operates is illegal because it encourages the production of oil and gas.

OGUK, which represents the UK’s offshore oil and gas industry, is currently lobbying the government to approve up to 18 new projects, according to the energy news site. Edie.

This figure includes the controversial Cambo oil field off the coast of Shetland. However, the International Energy Agency has said new investment in oil and gas projects must stop this year if governments are serious about tackling the climate crisis.

Drilling at Cambo could begin as early as 2022 if the OGA gives the green light to Shell and Aberdeen, Siccar Point. The field is expected to operate for about 25 years and produce up to 170 million barrels of crude oil from 2025 to 2050, with plans for a second phase of production beyond.

According to Greenpeace, the environmental damage would be equivalent to running 18 coal-fired power stations for a year.

Lord Deben, Chairman of the Climate Change Committee, statutory adviser to the government, told MSPs at Holyrood in August: “The rationale for any further exploration or production of oil and gas has to be very, very, very strong and I don’t can not say that I have so far seen such evidence.

Mikaela Loach, one of the activists who took the government to court, and who is a medical student at the University of Edinburgh, said: “UK government support for new oil and gas not only undermines climate targets global and any sense of climate justice, it also risks wasting huge sums of public money on projects that are more likely to line the pockets of polluters than to bring any real economic benefit to this country.

“As a country with significant historical responsibility in the climate crisis, the UK has an obligation to be one of the first to move away from oil and gas production, to ensure a just transition and, like Scotland, to commit to funding communities already dealing with the impacts of the climate crisis.

Jeremy Cox, a former oil refinery worker who is also a plaintiff in the High Court case, said: “Just weeks after world leaders met in Glasgow and the Prime Minister called them urged to keep the 1.5 ° C target alive, the UK government will have the hypocritical audacity to argue in the High Court that it should continue to subsidize new oil and gas production.

“We know that every new oil and gas project is incompatible with the 1.5 ° C target. The UK should listen to the International Energy Agency and the United Nations, reject projects like Cambo and use the public money we have wasted on oil and gas extraction to fund a just transition and help other countries to decarbonise.

A spokesperson for the Ministry of Trade, Energy and Industrial Strategy said The independent: “We cannot comment on the ongoing legal proceedings.

“The UK does not subsidize fossil fuels and we are following the approach of the International Energy Agency. No other major oil and gas producer has gone as far as the UK to support the sector’s gradual transition to a low-carbon future, as our North Sea Transition Agreement demonstrates.

“As we support the UK’s oil and gas industry’s transition to green energy, oil and gas needs will continue but decline over the next few years as we increase the capacity for renewables,” as recognized by the Independent Committee on Climate Change.

“The Cambo oil field was initially licensed in 2001. Proposals to develop oil fields under existing licenses are the responsibility of independent expert regulators. No decision has yet been made. “

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