Miliband to open door to North Sea drilling

Telegraph

5 hours ago

Two of the North Sea's most controversial drilling projects are set to go ahead as Ed Miliband rewrites the rules on carbon emissions.
The Energy Secretary is preparing to change the law on Britain's greenhouse gas emissions, which were relied on by a court last autumn to block Equinor's Rosebank oil field, off Shetland, and Shell's Jackdaw gas field, off Aberdeen.
Such a move would pave the way for the construction of the giant oil fields, and possibly open the door for more stalled fossil fuel projects in British waters to be restarted.
The two North Sea sites, which were once described as 'climate vandalism' by Mr Miliband, were blocked after environmentalists successfully challenged their oil and gas production licences.
Courts in Scotland backed claims that Mr Miliband's predecessors were wrong to approve the projects without considering the greenhouse gas emissions the oil and gas would generate from being burnt.
The court ruling infuriated Shell and Equinor, which had already spent hundreds of millions of pounds on the projects, leading to meetings between their top executives and senior ministers.
However, the Government is expected to release a draft of its new guidance on how to assess such emissions, The Telegraphunderstands – effectively opening the door for the energy giants to regain their licences and start producing oil and gas.
Mr Miliband's Department for Energy Security and Net Zero last night refused to comment on 'speculation' but a spokesman said: 'Michael Shanks, [the junior energy minister] is in Scotland on Thursday and we will say more then.'
It is understood that the draft rules will first be subject to a consultation after which companies will be able to reapply for licences awarded before the court ruling.
Sir Keir Starmer and Rachel Reeves, the Chancellor, have both previously spoken in favour of the projects – despite Mr Miliband's past opposition.
Rosebank and Jackdaw are respectively the largest and second largest undeveloped reserves left in UK waters, and could produce oil and gas for the next two to three decades once in production.
Jackdaw, a gas field 150 miles east of Aberdeen, is expected to account for 6pc of the UK's entire gas output once it comes on stream – potentially supplying several million homes.
Rosebank, 60 miles north-west of Shetland, will produce mainly oil which will be loaded into tankers and mostly exported, with the UK gaining from the taxes it generates.
However the new rules could lead to approval for many other such developments, potentially including the giant Cambo oil field controlled by Ithaca, which is also involved in Rosebank.
This is because the legal rulings that led to Rosebank and Jackdaw being blocked also froze development of many other UK fields whose licences had been issued under the same flawed assessment system.
These are thought to include the next phase of BP's giant Clair oil field and Serica Energy's Buchan Horst field.
Martin Copeland, of Serica Energy, said he would welcome any such move by the Government.
'These legal rulings have caused a hiatus across the North Sea,' he said.
'It goes far wider than Rosebank and Jackdaw. There are many other smaller developments that have been held up, impacting the supply chain companies and all their workers.'
The Scottish judicial review into Jackdaw and Rosebank followed a previous Supreme Court ruling in a separate case brought by environmental activist Sarah Finch against Surrey county council.
Court actions
She accused the council of acting unlawfully in allowing planning permission for oil production without considering its climate impacts.
The action related to a small oil field near Gatwick airport, but the ruling in her favour had implications for the entire UK oil and gas industry.
That result was used by Greenpeace and Uplift, environmental campaign groups, to win the Scottish court actions against, respectively, Shell and Equinor.
The judge, Lord Ericht, banned production, ruling that 'the private interest of members of the public in climate change outweigh the private interest of the developers'.
That ruling prompted the two main regulators – the Offshore Petroleum Regulator for Environment and Decommissioning, and the North Sea Transition Authority – to pause licensing decisions while the Government drew up new rules for assessing 'Scope 3' emissions – the term for greenhouse gases generated by the end-users of oil and gas products.
Last night Ms Finch, said the Government announcement of a new assessment process was long overdue.
'It means Equinor and Shell will have to submit new applications to develop these fields taking full account of all the emissions they will generate, including from burning the oil and gas they produce,' she said. 'We want to see a robust process in full knowledge of their climate impacts.'