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SEI scientists to UK: How to account for the “production gap” in future oil and gas leasing decisions

The UK’s Department for Business, Energy & Industrial Strategy (BEIS) called for input in December 2021 on how to design checkpoints that would ensure any future sale of offshore oil and gas leases are compatible with the country’s climate goals.

Speaking specifically to the agency’s inquiry on how to design a test that would account for the global production gap – the chasm between how much fossil fuels countries plan to produce and the levels consistent with limiting global warming to 1.5°C – SEI scientists Ploy Achakulwisut and Peter Erickson wrote BEIS a letter detailing how such a test could be operationalized based on their research.

Ploy Achakulwisut, Peter Erickson / Published on 3 March 2022

Exploring how and why different mitigation scenarios chart out different ways for achieving the low-carbon transition, Achakulwisut and Erickson lay out the policy implications of some of the major factors and assumptions influencing how quickly oil and gas production and use need to wind down to meet the 1.5°C-warming limit. What this means in practice is that the production gap the UK chooses to use in a climate compatibility checkpoint will depend upon its views on such key assumptions, which include the risk of temporarily overshooting 1.5°C this century and the amount of future carbon dioxide removal technologies they are willing to bet on.

Additionally, given that the UK considers itself a climate leader and has, along with other Parties, committed to the principle of equity under the Paris Agreement, “It may be incumbent upon a country like the UK to commit to a wind down of national oil and gas production that is even faster than the global average decline rates consistent with limiting warming to 1.5°C,” they write. “Translating equity principles into a specific, faster decline rate is a challenging endeavour. Until this can be accomplished, low-dependence, high-capacity countries like the UK could opt for the most precautionary of the 1.5°C-consistent scenarios with respect to oil and gas production.”

The researchers also argue that reducing the UK’s oil and gas production would lead to net decreases in global emissions of these fuels. Courts throughout the world increasingly recognize the need to account for the global market effects of fossil fuel supply decisions.

Read the letter in full for more details.

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