Jackdaw and Rosebank consents would square with UK government policy

A consultation on the proposed development at the Jackdaw site (3-page / 69KB PDF) closed on Monday, while the separate consultation regarding Rosebank (4-page / 67KB PDF) closes on Monday 17 August. Both projects are subject to fresh environmental assessment and consent after the Court of Session in Edinburgh determined the original decision-making process was flawed since ‘Scope 3’ emissions had not been factored into the initial environmental assessments for each project.

Since then, there has been a change in government and an associated pivoting in UK policy. The Labour government under Sir Keir Starmer’s leadership had been set against new oil and gas drilling in the North Sea, but industry now has hope that the government will soften its view under Andy Burnham’s premiership.

On the one hand, it is easy to empathise with the range of voices arguing against development consent for these projects. As the UK endures another heatwave this summer, wildfires proliferate across the country and Europe more widely, and with large areas of the south of the UK under drought conditions, the evidence that these conditions are caused by global greenhouse gas emissions and the resultant change to the climate seems incontrovertible.

Many of the same voices are also quick to say that producing oil and gas from the UK will do nothing to lower energy prices and question why the UK government would take any decision that they would see as exacerbating the climate crisis for no good reason.

There is a problem with the logic, however. Leaving to one side the question of whether it is possible to insulate ourselves against the “international” gas price – as I have written before – blocking Jackdaw and Rosebank will not reduce the short- and medium-term consumption of oil and gas in the UK.

The UK needs, and will continue to need, natural gas to fuel industry, generate electricity and supply the 25 million or so domestic boilers that heat UK homes. The UK cannot yet replace that with renewable energy, so if it declines to source gas from the North Sea, it will have to import it. Importing gas creates no new UK jobs, does not sustain existing direct or indirect employment in the UK, and generates no tax revenue for the Treasury. Importing gas on LNG tankers would also be worse for the environment and be bad for UK energy security, as it would increase the country’s dependency on overseas imports at a time of global uncertainty. For context, Jackdaw has the potential to deliver around 6% of the UK’s gas supply.

In terms of oil, it is true that significant quantities of oil produced in the North Sea are exported to be refined, mostly in Europe, and Rosebank would be no exception. However, the UK still needs petrol and diesel in material volumes. Currently, the majority of the oil produced from the North Sea returns to the UK in product form. The UK could decide to skip the production stage and simply source refined products derived from oil produced elsewhere in the world, but that would do nothing to sustain UK employment or UK tax revenue. The volume of petrol and diesel the UK consumes would not change.

It may be a few weeks before the results of the consultations are known and the resulting government decisions published, but giving these projects the greenlight would be consistent with the Labour Party manifesto pledge to honour existing licences – the underlying production licences for Rosebank and Jackdaw were granted years ago – and it would visibly support UK industry and sustain regional jobs and centres of excellence as engines for economic growth.