Chris Sawyer

A consultation on the proposed development at the Jackdaw site closed last Monday, while the separate consultation regarding Rosebank closes today. 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.

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.

It is easy to empathise with arguments against approving these projects. As the UK endures heatwaves, wildfires and drought, the evidence that these are caused by global greenhouse gas emissions and the resultant change to the climate seems incontrovertible. It is also argued that producing oil and gas from the UK will do nothing to lower energy prices, so why should the UK government take any decision that exacerbates the climate crisis without 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 - it is, 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 still needs natural gas to fuel industry, generate electricity and supply the 25 million or so domestic boilers that heat our homes. If we decline to source gas from the North Sea, it will need to be imported.

Importing gas does not create or sustain 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 producers at a time of global uncertainty. For context, Jackdaw has the potential to deliver around six per cent 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 and the majority of North Sea oil currently returns to the UK in product form. Sourcing refined products derived from oil produced elsewhere would do nothing to sustain UK employment or UK tax revenue. The volume consumed would not change.

It may be a few weeks before the results of the consultations are known, but green-lighting these projects 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 would visibly support UK industry and sustain regional jobs and centres of excellence as engines for economic growth.

Chris Sawyer is a partner at Pinsent Masons