UK’s plans to reach net zero emissions at risk, a study by the Common Wealth thinktank, and research by climate journal Desmog have warned.
More than a third of the licence blocks in the North Sea now have a private or foreign state-backed controlling interest, with fossil fuel firms from China, Russia and the Middle East playing an increasingly dominant role. Unlike the oil majors, many of these companies do not face public scrutiny, are not accountable to shareholders and are not required to have the same degree of corporate governance as leading listed businesses.
BP and Shell have begun to retreat from the North Sea, leading to a sharp rise in private equity firms and state-backed companies taking up licences,
Mathew Lawrence, Common Wealth’s director. “Who owns the UK’s oil and gas assets is changing dramatically and with it, how we secure a fossil-free future.” Lawrence said these companies are “typically less transparent and insulated from public pressure”
In 2010, private companies’ collective share of production in the North Sea was just 8%, but this jumped to 30% in 2020.
Channel 4 News uncovered tweets from Steve Brown, the chief executive of North Sea oil Orcadian Energy, which claimed that the global drive to meet the Paris Accord target to reach net zero carbon emissions by 2050 is “insane”.
The Common Wealth report highlights the involvement of several large state-owned entities in the North Sea, including Korea National Oil Corporation, Equinor from Norway, China National Offshore Oil Corporation, Russian firm Gazprom and the Abu Dhabi National Energy Company (TAQA). Among the private companies involved are Ineos, the chemicals firm owned by one of the UK’s richest people, Jim Ratcliffe. Others include Neo Energy, Tailwind and Siccar Point.
Siccar Point is the majority owner of the Cambo oil licence near Shetland, alongside the oil company Shell, which is the subject of a brewing legal battle over plans to explore for extra reserves to extend the project. Greenpeace has threatened to take legal action against the government if it approves the plans after promising to put an end to new oil exploration licences that do not align with the UK’s climate goals.
As socialists have previously stated, there will always be unscrupulous capitalists and corporations who will ignore the damage to the environment for short-term gains. Nor can national legislation adequately regulate those businesses.