A COURT has ruled that consent given for two UK oil and gas fields was unlawful, but that development of the projects can continue while the government finalises new approval rules. It moves the government a step further along the tightrope it’s walking to bolster the economy while meeting climate targets.
Today’s ruling by the Scottish Court of Session echoes last year’s judgement by the UK Supreme Court, confirming that the environmental impact assessment of a new energy project must consider not only the direct emissions (scope 1 and 2) from oil and gas extraction, but also the emissions resulting from customer use of the produced oil and gas (scope 3 emissions).
Plans for the Rosebank project, which is a joint venture between Equinor and Ithaca Energy, includes a floating production, storage, and offloading (FPSO) vessel to extract and process oil and gas produced from up to seven wells drilled at a field 130 km northwest of Shetland. Production was scheduled to begin by 2027 with the field estimated to have 300m bbl of recoverable reserves and a production lifespan of around 25 years.
Responding to the ruling, Ithaca said it was pleased with the outcome and will continue developing the project. It added that it will submit its scope 3 emissions assessment once the government’s new guidance is published this spring.
Shell issued a similar statement, saying work will continue on the Jackdaw project ahead of it seeking new consents. The Jackdaw field is around 250 km east of Aberdeen. Shell plans to build a platform to extract gas and condensate from four wells and pipe it to the existing Shearwater facility for processing before piping it ashore. Production was scheduled to start next year and last eight years.
A Department for Energy Security and Net Zero spokesperson said: “The government has already consulted on revised environmental guidance to take into account emissions from burning extracted oil and gas to provide stability for industry, support investment, protect jobs, and deliver economic growth. We will respond to this consultation as soon as possible and developers will be able to apply for consents under this revised regime. Our priority is to deliver a fair, orderly, and prosperous transition in the North Sea in line with our climate and legal obligations, which drives towards our clean energy future of energy security, lower bills, and good, long-term jobs.”
Last year the government accepted that the original consents for Rosebank and Jackdaw were unlawful and started a consultation on updating guidance to take account of scope 3 emissions. The consultation closed on 8 January and a spokesperson confirmed the new guidance will be published this spring. It appears to be set on a collision course between meeting legally binding climate targets that require the country to be net zero by 2050 and supporting projects that proponents argue are necessary for job security and economic growth.
Greenpeace, which brought the case against Jackdaw and Rosebank, said the emissions that will result from the projects are incompatible with UK climate goals and will not make the country any more energy secure as most North Sea oil is sold on the open market and exported.
Philip Evans, senior campaigner at Greenpeace UK, said the government “should use this moment to set out a new path for the North Sea, reaffirming their commitment to no new oil and gas, and prioritising clean energy”.
The industry group Offshore Energies UK is suggesting the opposite, that the government should unlock extra production from the North Sea to grow tax income.
OEUK CEO David Whitehouse said: “Unlocking an additional four billion barrels adds over £200bn (US$249) to our economy, supports our jobs, and supports our world-class supply chain with lower emissions than imports.”
He added: “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.”
Ithaca said Rosebank will support 2,000 jobs during construction and 525 jobs during the lifetime of the field, and it estimates £6.6bn of development costs will be spent with UK-based businesses.
Josh Burke, policy fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, said: “This is a critical decision, particularly on top of yesterday’s announcement by the chancellor that she will be supporting in principle the expansion of Heathrow Airport, which will put huge pressure on future carbon budgets.
“The evidence is clear and should not be ignored: the development of North Sea fossil fuel infrastructure would encourage other producers around the world to carry on as well and would be incompatible with efforts to limit global warming to 1.5 Celsius degrees. If the government is serious about its climate commitments it must reject any future applications from Equinor, or any other company, for new development in the North Sea.”
Jess Ralston, head of energy at the Energy and Climate Intelligence Unit (ECIU), said: “These fields make single-digit percentage difference to UK output, whereas the ramp-up of home insulation as well as heat pumps and EVs running on British renewables could dramatically and permanently cut the UK’s dependence on the volatile price of oil and gas which will increasingly need to be imported given the decades-long ongoing decline in North Sea output.”
Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.