Scrapping of DECC and creation of BEIS - what does it mean for the Oil & Gas industry?

United Kingdom

On becoming Prime Minister earlier this month, one of Theresa May’s first moves was to dismantle the Department for Energy and Climate Change (“DECC”), merging it with the Department for Business, Innovation and Skills. In their place, the Department for Business, Energy and Industrial Strategy (“BEIS”) has been created and will be headed by Greg Clark, Shadow Secretary of State for Energy and Climate Change from 2008 to 2010.

It remains to be seen what teething problems BEIS may experience, as it consolidates its new role.

Shortly following the announcement, concerns were raised generally that climate change would be placed further down the agenda, at a time when great strides have been taken to combat this global problem. The government has since revealed that climate change will be part of BEIS’ brief, and that climate change will be governed by an enlarged and more influential department.

Theresa May’s voting record has been largely favourable to the oil and gas industry. She has voted to help the onshore drilling sector by voting against a motion which would have required environmental permits for fracking. Additionally, on the same day in January 2015, she voted against a ban on the exploitation of unconventional petroleum.

Commenting on the appointment, Oil & Gas UK CEO Deirdre Michie said, “We will be looking to meet with Mr Clark as soon as possible to discuss the challenges our industry is facing and the opportunities the North Sea offers both for business growth and ensuring a secure energy supply for the UK.”

Sir Ian Wood welcomed the scrapping of DECC by suggesting that the move will bring higher levels of research and development, as well as increasing international trade, but also argued for the appointment of a dedicated energy minister to work as part of BEIS.

The function and objectives of the new department will become clearer over time, but during a period of general uncertainty, hopes are high that the scrapping of DECC may be considered a positive step towards making the oil and gas industry more efficient and prosperous.