Despite the G20 pledge in 2009 to collectively phase out fossil fuel subsidies, the UK has only increased its financial support to the industry ever since. On top of this, it has emerged that the decommissioning of the oil and gas fields in the North Sea bears a subsequent price tag, exceeding the remaining tax revenues. At present the cost of decommissioning falls to the British taxpayer to take care of. This is a new low in the successive Westminster governments’ stubborn and continuing support of the fossil fuel industry.
The Financial Times reports today that the UK faces a bill of £24 billion for shutting North Sea fields. FT reports that: “decommissioning costs are subsidised under rules allowing oil companies to claw back some of the £330bn of taxes paid since North Sea production began. The tax relief was designed to prevent clean-up liabilities deterring investment.”
Grenville Ham, deputy spokesperson of the Wales Green Party, issued a statement in response to the figures. He said:
“Tax breaks and subsidies to the fossil fuel industry are almost a taboo subject, yet they amount to several billions of pounds. The North Sea oil and gas companies made huge profits over the course of the past four decades. They should be the ones picking up the bill for the mess they have made and are now threatening to leave behind.”
“The true costs of extracting fossil fuels – such as to the environment and our health – are not accounted for by the government making these sizeable pay-outs. In the current situation, the hapless taxpayer is being forced to foot the bill for a £24bn clean-up operation, when this money should have been costed into the operation from day one.”
The Wales Green Party is calling for subsidies on all fossil fuels to be removed. Fossil fuel subsidies are the main obstacle to the growth of renewable energy.
Pippa Bartolotti, deputy spokesperson of the Wales Green Party, said: “We need to switch these subsidies away from fossil fuels and into developing truly sustainable systems of energy storage and generation. This is the only way we will be able to control both pollution and temperatures. By holding onto these huge fossil fuel subsidies at the cost of renewable energy development, the UK risks not being able to keep up the pace with progress.”
“In Wales there are huge opportunities for renewable energy generation, yet the government in Westminster has time and again hesitated to invest in and promote them. Swansea tidal lagoon is an apt example. Westminster’s cited lack of funds in the face of the budget deficit does not seem to be a problem when it comes to subsiding oil and gas yet it is halting the possibilities to develop renewable energy in this country.”