Rosebank and Jackdaw Oilfields

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 10 February.

“The Government’s priority is to deliver a fair, orderly and prosperous transition in the North Sea that recognises the role that oil and gas will play in the coming decades. This transition will be in line with our climate and legal obligations. It will drive us towards our clean energy future of energy security, lower bills and good, long-term jobs.

On 29 January, the Court of Session published its judgment on the Rosebank and Jackdaw oil and gas fields in the North Sea. The judgment set out that the previous consents granted to Rosebank and Jackdaw were unlawful, as they failed to take into account the emissions from burning the fuel produced. As a result, if developers wish to proceed with these projects, they will need to reapply for consent, this time considering scope 3 emissions, as required by the Supreme Court judgment last year.

Although the judgment itself is a matter for the courts, the Government have taken rapid action. In early January, we consulted on revised environmental guidance to take into account emissions from burning extracted oil and gas, to provide stability for industry. The consultation closed on 8 July, and we are working towards publishing the finalised guidance as soon as possible. Once the guidance is in place, the Government will resume making decisions with regard to the environmental impact assessments for offshore oil and gas developments. The court confirmed that it is in the interests of good administration for the consultation and guidance to be completed properly. It would therefore be inappropriate for me to comment on the specifics of individual projects such as Rosebank and Jackdaw in Parliament or anywhere else, because doing so would prejudice future regulatory decision-making should the respective developers decide to resubmit these projects for approval.

More widely, this Government are determined to deliver the long-term jobs and investment and the clean energy future that this country needs to ensure that people working in the North Sea, and those involved in the oil and gas industry across this country, have the long-term future they need”.

19:15:00

My Lords, on many occasions in this House the Minister has made it clear that he recognises the importance of oil and gas to our energy transition. In fact, net zero 2050 envisages that up to 25% of our energy will still be coming from our own clean hydrocarbon fields, and that figure includes Rosebank and Jackdaw. I ask the Minister plainly: what is plan B if these critical fields are not granted a future licence?

My Lords, I am not going to speculate on individual projects. The noble Lord will understand that I cannot say anything that would prejudice future regulatory decision-making. What I can say is what the Government are doing. The noble Lord knows that on 29 January the Court of Session published its judgment in relation to the Rosebank and Jackdaw oil and gas fields, setting out that previous consents granted to those two fields were unlawful as they failed to take into account the emissions from burning the fuel produced. If developers wish to proceed with these projects, they will have to reapply for consents, this time considering scope 3 emissions, as required by the Supreme Court judgment last year. The judgment itself is of course a matter for the courts, but we took action in October, in light of the original Finch judgment, to consult on revised environmental guidance. The consultation closed on 8 January, and we are working towards publication of finalised guidance as soon as we possibly can. Once that is in place, the Government will resume making decisions with respect to environmental impact assessments for offshore oil and gas developments, and the court confirmed it is in the interests of good administration for that consultation and guidance to be treated properly. That is the situation. I say again that I recognise that, although the UK continental shelf may be a declining asset, it is an important one. We believe we have reached a sensible position of not allowing new licences, but there are a number of applications that have already received licences that need to go through the consent process. The guidance, when published, will set out the parameters on which the applicants can apply. We will then have to see the outcome of that proposal. In the meantime, I acknowledge the work that has been carried out in the North Sea. The noble Lord knows we are very committed to a just transition for people involved who will be coming out of the industry. I acknowledge the importance of the industry and the role that it has to play for many years to come.

My Lords, I welcome the commitment that this Government aim to deliver a fair, orderly and prosperous transition in the North Sea, a transition in line with our climate and legal obligations. The Liberal Democrats are opposed to new oilfields at Jackdaw and Rosebank. Instead, we call on the Government to increase the amount, scale and pace of investment in our renewable energy future. Will the Government confirm whether they will treat any further licence requests for the Jackdaw and Rosebank oilfields as existing or new applications? I can see no prejudicial reasons why that question cannot be answered today.

First, my Lords, we need to draw a distinction between licensing and consenting. Licensing gives rights to search and bore for petroleum in the UK continental shelf, and those are vested in the Crown. The NSTA is a non-departmental public body, sponsored by my department, that is responsible for maximising the economic recovery of oil from the North Sea. Blocks of the North Sea are allocated to operators in that way. The operators can then explore for oil and gas under the licence. At that point, there is often a five-year gap between licensing and consenting. What we have said is that we will not consent to any new licenses, and we will shortly be consulting on that. I am sorry, but I am not going to comment more in relation to individual projects such as Rosebank and Jackdaw. I have to be very careful as a Minister in the department in relation to future processes that will be gone through in which we exercise decision-making. I am sorry, but I really cannot go any further than that.

Perhaps I might make it a bit wider, to avoid putting the Minister in a difficult situation. We have heard that there are a number of projects that have previously been approved to a certain stage and—at the risk of a pun—are in the pipeline. Have the Government made any estimate of the impact that schemes in this sort of pipeline will have on the UK being able to meet its net-zero targets?

My Lords, there clearly are a number of projects that have gone through the licensing process but have yet to come through to the end. We are confident that at the end of the road —or the end of the pipeline, as the right reverend Prelate put it—we will have a situation where, because of no new licences, we will have a thriving asset in the North Sea. The production will reduce, as it is doing at the moment. This will fit in with our overall strategy towards net zero. Clearly, this needs sensitive management. I cannot say it is an art rather than a science, but it is difficult to be more precise than that. I also refer the right reverend Prelate to the work of NESO, which has made some points on the role of unabated gas. It is also worth reflecting that much of the oil and gas coming from the UK continental shelf is exported. This is another feature of this very interesting subject.

My Lords, I understand the Minister’s desire not to comment on any individual projects. So, I will ask a general question. A report published this week by the Grantham Institute on Climate Change, chaired by the noble Lord, Lord Stern, from these parts, looked at the current geopolitical situation. It argued that any further advance toward drilling or exploration in the UK would signal to other fossil fuel producers—particularly the US and Russia— that we support a “business as usual” approach to the oil and gas industry. That is the geopolitical context. Will the Government consider that?

My Lords, I have always thought that Aberdeen’s influence in the oil and gas sector is something we should treasure. Whether actions we take here will be influential internationally is a matter we will have to see follow. We think it right that developers who have gone through the licensing process must be allowed to finish that. We believe that our calculations embrace that. We have reached the right decision: we will continue to support the North Sea and recognise the contribution it makes, but we will not agree to any new licences. We have reached a balanced approach there. I am of course very interested in the report the noble Baroness mentioned.