North Sea operators are able to press ahead the development of two major oil and gas fields despite environmental campaigners claiming a “historic win” in a landmark court ruling.
Reported by Energy Voice, Shell and Norwegian firm Equinor will continue work on the Rosebank and Jackdaw North Sea projects and resubmit their consent applications.
This comes despite Scotland’s Court of Session deciding to overturn the approvals.
This was in response to cases brought by two environmental groups who argued the UK government has acted unlawfully when granting consent for the field.
Outlining the judgement on Thursday, Lord Ericht agreed the decision to grant consent was “unlawful” and ruled the operators will have to resubmit environmental impact assessments (EIAs) for the project.
Campaign groups Greenpeace and Uplift had lodged the case after regulators and the previous Conservative government gave approval for the multi-billion pound Rosebank and Jackdaw projects.
The decision comes in the wake of a Supreme Court ruling in the Finch case last year, which determined approvals for fossil fuel projects must account for all downstream emissions.
However the new environmental assessments must await guidance from the UK Labour Government which due sometime in the Spring.
The UK government is currently undertaking a consultation on how to assess scope 3 emissions in new oil and gas projects following the Supreme Court’s Finch ruling.
Norwegian firm Equinor and partner Ithaca Energy received approval to develop the Rosebank oil field off the west coast of Shetland from the North Sea Transition Authority (NSTA) in 2023.
Meanwhile, oil major Shell secured consent for the Jackdaw gas field off the coast of Aberdeen in 2022.
They argued the environmental impact assessments (EIAs) for the projects did not take account for downstream, or scope 3, emissions and were therefore invalid.
Subsequent to the court case, Shell and Equinor pledged to pool all their North Sea assets including the two fields at the heart of the controversy. Shell has said the major North Sea merger will likely complete at the end of the year.
Rosebank and Jackdaw ruling
Outlining the judgement on Thursday, Lord Ericht said the decision to grant consent was unlawful and ruled the operators will have to resubmit EIAs for the project.
The judge suspended the ruling pending the energy secretary’s re-consideration of the matter, which he said would give Equinor, Ithaca Energy and Shell “options” on how to proceed in the interim.
However, he said no oil or gas should be extracted before a new decision on consent is made.
In the published opinion, Lord Ericht said there was a public interest in having the project approvals “remade on a lawful basis” because of the effects of climate change.
“The effect of the burning of fossil fuels on climate change and the lives of individual persons is now well recognised in law,” he added.
The judgement stated: : “Having considered all the circumstances of the case and the various public and private interests, I have reached the conclusion that the balance lies in favour of granting reduction.
“The public interest in authorities acting lawfully and the private interest of members of the public in climate change outweigh the private interest of the developers.
“The factors advanced by Shell, Equinor and Ithaca in respect of their private interest do not justify the departure on equitable grounds from the normal remedy of reduction of an unlawful decision.
Rosebank The Knarr FPSO, which Equinor plans to use for the Rosebank oil field development.
“The decisions will be reduced, and can be taken again, this time taking into account downstream emissions.”
Under Labour, the UK government decided not to defend the judicial review against Rosebank and Jackdaw in light of the Finch ruling.
In response to the ruling, an NSTA spokesperson said: “We note the court’s decision and are considering the judgement.”
Equinor ‘pleased’ to continue Rosebank work
The Norwegian firm said it will continue efforts to develop Rosebank which it says will create up to 2,000 jobs.
A spokesperson for Norwegian firm Equinor said: “We welcome today’s ruling and are pleased with the outcome which allows us to continue with progressing the Rosebank project while we await new consents.
“Rosebank is critical for the UK’s economic growth, with an estimated 77% (£6.6bn) of total direct investment benefiting UK businesses.”
The spokesperson said Equinor and Rosebank partner Ithaca Energy have already committed over £2.2bn on developing the project.
“We welcome the court’s judgment which enables Equinor to continue developing a project expected to create up to 2,000 UK jobs during its development phase,” the spokesperson said.
Equinor will work closely with the NSTA and environmental regulator OPRED alongside the Department for Energy Security and Net Zero (DESNZ) to progress Rosebank, they added.
This includes plans to submit a downstream emissions assessment in “full compliance” with the government’s new environmental guidance, set to be published later this Spring.
Ruling ‘rightly allows’ Jackdaw to continue, Shell says
Meanwhile, a spokesperson for Shell said the ruling “rightly allows work to progress” on Jackdaw while the company seeks new consent for the “nationally important energy project”.
“We have spent more than £800 million since the regulator approved Jackdaw in 2022,” the spokesperson said.
Greenpeace Jackdaw Shell legal Shell’s Jackdaw project is planned as a tie-back to the Shearwater gas hub.
“Swift action is needed from the government so that we and other North Sea operators can make decisions about vital UK energy infrastructure.”
“When operational, Jackdaw would provide enough fuel to heat 1.4 million UK homes, at a time when older gas fields are reaching the end of their production and the UK is reliant on imported gas to meet its energy needs.”
Uplift calls ruling ‘significant win’
Campaign groups Uplift and Greenpeace welcomed the court ruling, calling it a “significant win” for the climate.
Uplift executive director Tessa Khan said the ruling “means Rosebank cannot go ahead without accounting for its enormous climate harm”.
“The continued burning of oil and gas is why we are seeing more extreme weather like Storm Eowyn and flooding that have claimed lives and caused hundreds of millions of pounds in damage and clean up costs, not to mention the devastation it’s causing in other countries,” Khan said.
Protestors against the Rosebank oilfield in London in 2023. Protestors against the Rosebank oilfield in London.
“Most people are now joining the dots with endless oil and gas drilling and are worried about the future.”
Khan said the Rosebank project is a “bad deal” for the UK, which will “do nothing to lower our energy bills or boost UK energy security”.
“The North Sea is in decline, with the number of jobs supported by the oil and gas industry more than halving in the past decade,” Khan said.
“As we roll out major offshore wind projects, the future of jobs in the North Sea is in building the industries that will make those wind turbines at home.
“If Equinor and Ithaca Energy try to push Rosebank through despite this ruling, the government must reject it.”
Greenpeace calls for ‘new path for the North Sea’
Meanwhile, Greenpeace UK senior campaigner Philip Evans called the ruling an “historic win”.
“The courts have agreed with what climate campaigners have said all along: Rosebank and Jackdaw are unlawful, and their full climate impacts must now be properly considered,” Evans said.
“Fossil fuels are an economic dead end. Now that the ball is back in the government’s court, ministers have the opportunity to sort out the legal mess left by their predecessors.”
Evans called on the UK government to “set out a new path for the North Sea” and reaffirm its commitment to no new oil and gas developments.
UK still needs oil and gas, OEUK says
Meanwhile, industry body Offshore Energies UK (OEUK) said the UK still needs projects like Rosebank and Jackdaw on the road to net zero emissions by 2050.
OEUK said the UK will use an estimated 15 billion barrels of oil and gas between now and 2050, but the country will produce less than 4 billion barrels.
The trade body said unlocking an an additional 4 billion barrels of domestic production through projects like Rosebank and Jackdaw will add over £200bn into the UK economy, reducing the need for imports.
OEUK chief executive David Whitehouse said the government’s revised EIA process which manages consents “must be robust and 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,” Whitehouse said.
He argued that if the UK does not exploit its North Sea resources, it will simply import a “higher carbon footprint” to satisfy domestic demand, leading to lower revenues for the Treasury.
“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,” he said.
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