The Scottish Chambers of Commerce (SCC) said the court decision to allow the Rosebank and Jackdaw oil and gas fields to resubmit environmental assessments while consents are sought under new UK environmental impact guidelines “is a welcome boost given how much is at stake.”
SCC chief executive Liz Cameron said allowing work to continue on both fields is a “victory for common sense and averts a potentially international embarrassment for the UK on energy security and investment.”
Cameron said “destroying our domestic energy sector to import foreign and significantly more costly oil and gas with a higher global carbon footprint is madness.”
The SCC said in a statement: “The High Court ruling on the Rosebank and Jackdaw oil and gas fields will provide a crucial test for governments’ agenda for growth …
“Rosebank is a joint venture between oil and gas giants Equinor and Ithaca, and the largest untapped field in the North Sea with potential to produce up to 500 million barrels of oil.
“Jackdaw is owned by Shell and expected to produce 40,000 barrels a day for two decades.”
Cameron said: “It is vital that they (governments) show pragmatic leadership and unlock the £200bn to the UK economy whilst protecting the livelihoods of 200,000 working families.
“The decision to allow both fields to resubmit environmental assessments whilst consents are sought under new UK environmental impact guidelines is a welcome boost given how much is at stake.
“This is not just about our ability to produce an additional four billion barrels of oil and gas to meet the industry body Offshore Energies UK’s estimated 11bn shortfall on the road to net zero by 2050.
“It also makes environmental sense at a time when we rely on 40% of imports to meet our overall energy demand – the highest level in more than a decade – with nearly £20bn of oil and gas imported from Norway, most of our imported oil sourced from the US and liquified natural gas from the US, Qatar and Peru.
“That’s nearly four times the carbon footprint of domestically produced supplies …
“We echo the views of Aberdeen and Grampian Chamber of Commerce that allowing work to continue is a victory for common sense and averts a potentially international embarrassment for the UK on energy security and investment.
“Destroying our domestic energy sector to import foreign and significantly more costly oil and gas with a higher global carbon footprint is madness and we can only hope that Energy Secretary Ed Miliband will fall in line with the PM’s growth agenda and back the plans with new and sensible guidance on environmental considerations.”
The SCC said the UK Labour government’s consultation on “how to assess scope 3 emissions in new oil and gas projects” following the Scottish High Court’s ruling that the decision to grant consent to the new oil and gas fields was unlawful, is due in Spring.
“On Thursday, the court quashed decisions by the UK government to approve drilling in two vast North Sea oil and gas fields after legal challenges from environmental campaigners Greenpeace and anti-fossil fuel group Uplift but said the operators can resubmit environmental impact assessments for the projects,” added the SCC.
“The judgement comes after a Supreme Court ruling last year determined approvals for fossil fuel projects must account for all downstream emissions.
“A decision on whether to drill in the two fields will now have to be made by regulators and the new Labour administration which succeeded the Conservatives who backed the projects.
“Shell has spent more than £800 million since the regulator approved the Jackdaw field off Aberdeen in 2022. It will provide enough fuel to heat 1.4 million UK homes. Equinor and Ithaca have already committed more than £2.2 billion on developing Rosebank to the west of Shetland.”
Cameron added: “The businesses and workforces we represent want a just transition to net zero which grows our economy, protects jobs and keeps the lights on.
“Rosebank alone will create up to 2000 jobs and an estimated £6.6bn of direct investment benefitting UK businesses and we welcome the PM’s pledge to work at speed on new guidance and to protect jobs and investment in the long term whilst managing existing fields for the duration of their lifespan.
“Those seeking to deny that fair transition by halting future oil and gas production would make the UK even more dependent on imports to meet our energy needs – in effect outsourcing and increasing our emissions, rather than reducing them, and threaten the livelihoods of 200,000 working families.
“The public are waking up to this farce – almost three quarters of Scots back domestic production – and our policymakers need to catch up quickly by showing pragmatic leadership and engaging with the SCC and the British Chambers of Commerce North Sea Transition Taskforce as a matter of urgency.”
Offshore Energies UK (OEUK) said a robust process for Environmental Impact Assessments “must be delivered at pace” following the decision from the Court of Session.
The judge ruled that the two North Sea oil and gas projects can continue development works while the arrangements for a revised environmental impact assessment are completed.
“Development work can continue, however production from these fields will not begin until revised environmental consents are in place for each project,” said OEUK.
“The UK Government is looking to finalise its guidance on environmental impact assessments, following the Finch Ruling last summer. Industry recognises the importance of a legally robust and practical framework that aligns with the principle and outcomes of the ruling.
“The UK offshore oil and gas industry was one of the first sectors to make a commitment to net zero by 2050 and remains committed to that goal. It has already reduced production emissions by 28% since 2018 and is on track to deliver reductions of 50% by 2030.
“OEUK today reinforced official data which showed the UK is expected to use 15 billion barrels of oil and gas between now and 2050 but is expected to produce less than 4 billion barrels. OEUK has shown that unlocking an additional 4 billion barrels, while still not meeting domestic demand, adds over £200 billion to the UK economy, supporting UK jobs, and supporting a UK world class supply chain.
“With significant oil and gas reserves around in UK offshore waters, OEUK said these should be used responsibly alongside renewable energy. It said to avoid a reliance on imported oil and gas, investors must be confident in the processes required to bring projects forward.”
OEUK Chief Executive David Whitehouse said: “… the court has confirmed that these projects can now move forward according to due process. Development work can continue, however production from these fields will not begin until revised environmental consents are in place for each project.
“The revised environmental impact assessment process which manages these consents must be robust and must be delivered at pace.
“Our domestic oil and gas remain a strategic asset for the UK. Industry takes its environmental responsibilities and the goal of net zero seriously which is why we need a robust process which provides clarity to investors, enables timely and predictable decisions, and provides certainty.
“We still have significant oil and gas reserves in our offshore waters and we should use them responsibly alongside renewable energy. Unlocking an additional four billion barrels adds over £200 billion to our economy, supports our jobs, and supports our world class supply chain with lower emissions than imports.
“If we do not produce it here in the North Sea, we will simply import it – paying less tax to the Treasury and creating a higher carbon footprint.
“As a society we are in a critical period for shaping the future of the North Sea, the UK’s energy system, the future of those working in the sector, the communities that depend on those jobs, and the wider UK economy. We must get this right.”