UK Court Blocks 2 Major North Sea Oil & Gas Projects Over Climate Concerns

A Scottish court has ruled that the UK government’s approval for two major North Sea oil and gas projects was unlawful.

The decision, which came on Thursday, is a victory for environmental campaigners and raises questions about the future of fossil fuel developments in the UK.

The ruling affects Shell and Equinor’s Rosebank and Jackdaw fields, which have already been approved for development.

The Court of Session in Edinburgh determined that the government failed to consider the downstream emissions produced when the oil and gas were used—when it approved these projects.

Greenpeace and the environmental group Uplift challenged the approvals, arguing that these emissions should be taken into account under UK climate change law.

Judge Andrew Stewart, who presided over the case, said the public interest in addressing climate change outweighed the private interest of developers.

He ruled that the decisions to approve the projects must be reassessed by the government, although the companies are allowed to continue some work, such as drilling wells until a final decision is made. However, the companies cannot begin extracting oil or gas until new approvals are granted.

A Shell spokesperson stated that the ruling allows work to continue on the project, describing the energy development as nationally important.

Shell has already invested over £800 million in the Jackdaw field. Equinor, the Norwegian company developing the Rosebank oil field, also expressed satisfaction with the decision to allow work to continue while awaiting new consent.

Equinor plans to invest £2.2 billion in Rosebank, one of the UK’s largest untapped oil fields, which is expected to contain up to 300 million barrels of oil.

The ruling comes from a previous Supreme Court decision, which mandated that the environmental impact assessments for fossil fuel projects must consider not just the emissions from extraction, but also from the burning of oil and gas (known as downstream emissions).

The UK government acknowledged the need to reassess its approval processes. A spokesperson for the Department for Energy Security and Net Zero stated that new guidance will be provided in the spring, allowing developers to apply for new approvals under revised rules.

Greenpeace hailed the ruling as a “historic win,” with senior campaigner Philip Evans commenting that the age of governments approving new drilling sites without considering their climate impacts is over.

He urged the government to set a new course toward clean energy, focusing on renewable energy instead of new oil and gas projects.

Shell and Equinor argued that the development of these fields is crucial for UK energy security. Shell pointed out that the Jackdaw field could provide enough gas to heat 1.4 million homes, while Equinor added that the Rosebank project would create jobs and support the UK’s energy needs.

Both companies have already made significant investments in the projects, with Shell committing £1.1 billion to Jackdaw and Equinor investing £2.2 billion in Rosebank.

Despite the court’s ruling, both companies are allowed to continue preparatory work, such as drilling wells and addressing construction and engineering issues. However, no oil or gas can be extracted until the government reassesses the projects and issues new consents.

The decision to halt the projects has raised concerns about its impact on the UK economy, with some arguing that the ruling could harm the country’s reputation as a destination for investment.

Ithaca Energy, a partner in the Rosebank project, warned that delaying the project could damage the UK’s image in terms of attracting international investment.

The Labour government, which came into power in July, has committed to achieving net-zero carbon emissions by 2050 and is reconsidering the role of oil and gas in its energy strategy.

The government is expected to release updated guidelines in the coming months, which will incorporate the Supreme Court’s ruling and will affect the future of the oil and gas industry in the UK.

Activist groups like Greenpeace and Uplift have argued that the government’s approval of these projects violated climate change obligations, and they are now calling for a shift toward renewable energy solutions.

References: Reuters, NYTimes

Source: Maritime Shipping News