The UK government is set to resume the approval process for two controversial oilfield projects on Thursday. This decision comes despite new data indicating that the UK will be nearly entirely reliant on imported gas by 2050, regardless of whether these projects are approved.
Michael Shanks, the Minister for Energy Security, will announce the results of a government consultation on the large Rosebank field and the smaller Jackdaw field, in what the industry says will establish the tone for future North Sea production.
The announcement coincides with new figures from the climate group Uplift, suggesting that the UK will be heavily dependent on foreign gas by 2050, even if the oilfields are approved.
According to an oil and gas industry source, “This consultation is more about the industry’s ability to continue producing oil and gas in the UK rather than making decisions on specific projects.”
Tessa Khan, the Executive Director of Uplift, stated, “The Labour government must do the right thing and resist the oil and gas firms that have profited while millions of people in the UK have struggled. The government will be closely watched to see if the guidance offers a credible climate test.”
Government officials expect the consultation response to be mainly technical and not indicative of whether Ed Miliband, the Energy Secretary, will ultimately approve the projects if their developers reapply for consent.
However, industry insiders are keen to understand the government’s stance on the extent of Miliband’s authority, whether it will distinguish between oil and gas production, and any potential mitigations suggested for companies.
The consultation was launched following a court ruling that the initial permissions for Equinor, the primary developer at Rosebank, and Shell, responsible for Jackdaw, were unlawful as they did not account for the full scope of carbon emissions the projects would generate.
The oil and gas industry argues that the ruling is unfair because companies cannot reduce their emissions as car manufacturers can through increased vehicle efficiency. They also contend that gas will remain part of the UK’s energy mix for decades to come.
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In its submission, Offshore Energies UK, representing North Sea oil and gas companies, stated that the current draft guidance does not consider the “relatively unusual nature of oil and gas projects.”
Should Equinor and Shell reapply, Ed Miliband might need to take a quasi-judicial role to decide whether drilling permissions should be granted. The Labour manifesto does not support new licenses for new fields, but this does not apply to Rosebank and Jackdaw, which already hold their licenses and require environmental consent.
Government sources say the Treasury is pushing for the projects to go ahead, emphasizing growth as a priority. However, many Labour MPs are pressuring Miliband to reject the projects if they could jeopardize the UK’s climate commitments.
Labour faces pressure from the Conservatives and Reform to abandon its net-zero target, but Miliband recently stated that he and other green energy supporters will “win the fight” against climate skeptics.
New analysis by Uplift suggests the UK’s dependence on gas imports will rise from 55% currently to 94% by 2050, even if new oilfields are approved. This is due to the UK already having depleted much of its gas reserves in the declining basin.
