More than eight billion pounds ($10 billion) of oil and gas projects in the North Sea could quickly get the green light. This comes as fossil fuel companies are taking advantage of a surprise tax break promoted by British Chancellor of the Exchequer Rishi Sunak.
The official last month introduced a one-off tax on North Sea oil and gas operators who have made huge profits from rising energy prices. The tax aims to raise $6.3 billion to help fund and offset higher family bills.
Boris Johnson’s government imposed this extraordinary tax on the profits of oil and gas companies. Caving in to pressure to support Britons who face record declines in living standards. How are the net emissions reduction targets?
The energy dividend tax also provides tax savings for every pound of investment that businesses make. In a move to encourage companies to reinvest their windfall profits in the UK and build up a local energy supply. The increased tax rate will be in effect until prices return to a “more historically normal level” or until the end of 2025.
However, activists have warned that increased production in the North Sea could hamper efforts to tackle climate change. Mike Childs, head of policy at Friends of the Earth, thought about the decision. “Fiscal stimulus to encourage more oil and gas exploration means projects that teeter on the brink of approval or rejection now seem more likely.”
Oil projects in the North Sea
Mike Childs and other spokespeople for environmental organizations have questioned Johnson’s push for North Sea oil projects “If there was any confusion about whether the UK was a climate leader or a laggard, this has certainly removed all doubt. The science could not be clearer,” Childs added. that new oil and gas are incompatible with a safe and habitable planet.
Broker Shore Capital said guardian That tax breaks provided a “powerful incentive”. Especially for incumbent producers who have hitherto been reluctant to press the button for discoveries ready to develop.”
Analysis shows that there are more than $10 billion worth of oilfield projects awaiting a final investment decision in the North Sea. This includes the Rosebank field, owned by the Norwegian company Equinor, which is located northwest of the Shetland Islands. It can contain more than 300 million barrels of recoverable oil. It is estimated that its development will cost 5,600 million dollars
Earlier this year, Aberdeen-based Ithaca Energy bought Siccar Point, owner of the Campo field, for $2.515 million off Shetland. Ithaca said the field was a “great opportunity” and would create thousands of jobs, but the project faced significant opposition from climate activists.
Other potential projects include Orcadian Energy’s pilot field, which could cost around $900m (£717m) to develop. and the $1.4 billion Bhushan Oil and Gas Redevelopment Project.
win, win more
Omani oil companies BP and Shell have warned that the tax could affect future investment decisions. However, tax credits may also encourage more spending in the short term.
Craig Hoy, analyst at Shore Capital, said: guardian Expect more investment from North Sea oil projects. He added, “Because the accumulated losses cannot be used to offset the tax. New capital spending may be the only effective means of mitigating the high tax that has emerged.”
Meanwhile, Wood MacKenzie North Sea Research Director, Neivan Boroujerdi, said: “This move is unlikely to make new or existing projects unprofitable. It can also accelerate ‘ready-to-go’ developments such as Rosebank and Cambo.”
Serica Energy, which produces about 5% of gas in the UK, has assured investors that it can use investment incentives to lower its tax bill.
Serica further indicated that it plans to spend about $78 billion in the UK in 2022, including developing the North Egg in the North Sea. This, he said, “would offset a significant portion of the energy dividend tax that would otherwise have been paid on Serica’s earnings this year.” Serica shares have regained some of the ground they have lost since the windfall dividend tax was announced.
The windfall tax was a business policy idea and remains a contentious issue in Westminster. Speaking in the House of Commons, shadow chancellor Rachel Reeves accused the government of using “sleight of hand” to create a “cashback policy”.
Alarming amounts of carbon dioxide
As the British government touts tax credits for oil and gas projects in the North Sea, the amount of carbon dioxide emitted broke a record in May. Continuing its constant rise, according to a group of scientists. It is now 50% higher than the pre-industrial average, before humans began burning oil, gas and coal in the late 19th century.
There is more carbon dioxide in the atmosphere now than at any time in about 4 million years, National Oceanic and Atmospheric Administration officials said. New York times.
The gas concentration was about 421 parts per million in May, the peak of the year. As a result, power plants, vehicles, farms, and other sources continue to release massive amounts of carbon dioxide into the atmosphere. Emissions totaled 36.3 billion tons in 2021, the highest level in history.
As the amount of carbon dioxide increases, the planet continues to warm. With effects such as increased flooding, extreme heat, drought, and exacerbation of wildfires. Global average temperatures are now around 1.1°C, which is higher than in pre-industrial times.
Rising carbon dioxide levels are further evidence that countries have made little progress. Towards the target set in Paris in 2015 to limit warming to 1.5°C, which is the limit beyond which scientists say the potential for catastrophic effects of climate change increases exponentially.
It’s a “stark reminder that we need to take urgent action,” said Rick Spinrad, director of the National Oceanic and Atmospheric Administration (NOAA).
Carbon dioxide levels fell slightly around 2020 during the economic slowdown caused by the pandemic. There was no effect on the long-term trend, Peter Tans said. Senior Scientist at the National Oceanic and Atmospheric Administration (NOAA) Global Monitoring Laboratory.
The rate of increase in carbon dioxide concentration, he said, “has just continued.” “And it continues at about the same rate as it has in the past decade.”
Tans and others in the lab put this year’s maximum concentration at 420.99 parts per million, based on data from a National Oceanic and Atmospheric Administration (NOAA) weather station over Mauna Loa volcano in Hawaii.
Read also in Change16.com:
Thanks for reading Change16. Your subscription will not only provide accurate and honest news, but also contribute to the re-emergence of journalism in Spain to transform consciousness and society through personal growth and the defense of freedoms, democracies, social justice, environmental preservation and biodiversity.
As our operating income is under a lot of pressure, your support can help us do the important work we do. If you can, support Cambio16 Thank you for your contribution!
“Subtly charming bacon junkie. Infuriatingly humble beer trailblazer. Introvert. Evil reader. Hipster-friendly creator.”