Ministers have opened the door to approving drilling at two controversial North Sea oilfields, as new guidance on how energy firms should account for future emissions was released.
Michael Shanks, the energy security minister, said on Thursday the guidance would “offer clarity on the way forward for the North Sea oil and gas industry”, after a supreme court ruling in 2024 that blocked drilling.
In January, a judge at Edinburgh’s court of session found that permissions given to Equinor, the lead developer at the Rosebank site, and Shell, which is in charge of Jackdaw, were unlawful because they did not take into account the full scope of carbon emissions they would produce.
The judge ruled that the applications should have accounted for the carbon produced by burning the oil and gas produced at the fields, not just that produced by the drilling.
The new guidance is aimed at applications for projects in North Sea oil and gas fields that are already licensed, and sets out how environmental impacts of oil and gas should be assessed.
Shanks said: “It marks a step forward in ensuring the full implications of oil and gas extraction are considered for potential projects, and that we ensure a managed, prosperous and orderly transition to the North Sea’s clean energy future, in line with the science.
“We are working with industry, trades unions, local communities and environmental groups to ensure the North Sea and its workers are at the heart of Britain’s clean energy future for decades to come – supporting well-paid, skilled jobs, driving growth and boosting our energy security.”
The announcement was made as new figures from the climate group Uplift suggest Britain will be almost entirely dependent on foreign gas by 2050, even if the fields are given the green light.
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It shows the UK’s gas import dependency will increase from 55% today to 68% in 2030, 85% in 2040 and 94% in 2050, even if new oilfields are given the green light. This is because the UK has already burned through most of the gas in the declining basin.
Tessa Khan, the executive director of Uplift, said: “This Labour government needs to do the right thing and stand up to the oil and gas firms that have got obscenely rich while millions of people in the UK have struggled, and stop their endless polluting. All eyes are now on the government to see if this guidance provides a credible climate test.”
The oil and gas industry has argued that the supreme court ruling is unfair because they cannot reduce their emissions in the same way as car companies, which can make their vehicles more efficient. Companies also argue that gas will continue to be a part of the UK energy mix for decades to come, regardless of how much is produced in the UK.
In its submission to the government before the consultation, Offshore Energies UK, which represents the North Sea oil and gas companies, said the current draft guidance did not take into account the “relatively unusual nature of oil and gas projects”.
If Equinor and Shell do reapply, Miliband could have to play a quasi-judicial role in deciding whether to grant permission to begin drilling. The Labour manifesto rules out granting new licences for new fields, but ministers say that does not apply to Rosebank and Jackdaw, which already have their licences and are now awaiting environmental consent to begin drilling.
Government sources say the Treasury is pushing hard to allow the new developments as it focuses the government’s economic policy on growth. But many Labour MPs want Miliband to rule them out if there is a risk they could lead to the UK breaking its climate commitments.
Labour is under pressure from the Conservatives and Reform to drop its net zero target altogether. Miliband said this week that he and other green energy enthusiasts would “win [the] fight” against climate sceptics.
A Shell spokesperson said: “We are reviewing today’s guidance and remain committed to delivering Jackdaw, which is a nationally important energy project and supports the government’s growth agenda.
“Jackdaw would provide enough fuel to heat 1.4m UK homes at a time when the UK remains reliant on imported gas to meet its energy needs.”
Equinor said: “We are currently reviewing today’s announcement. We remain committed to working closely with all relevant stakeholders to advance the Rosebank project.
“We welcome clarity and can confirm that we will submit a downstream end user combustion emissions (‘Scope 3’) assessment in full compliance with the government’s new environmental guidance.”