UK Supreme Court decision on Surrey oil imperils Rosebank further
The future of Rosebank appears even more uncertain after a landmark decision by the UK Supreme Court last month.
The change of government in the UK coupled with a recent decision by the Supreme Court vis-a-vis a Surrey oil and gas site are pointing at a change of sentiment in the country towards oil and gas facilities including the Rosebank field, with companies now facing renewed scrutiny and a deteriorating outlook, experts told Gas Outlook.
Newly elected Labour Prime Minister Keir Starmer had promised in the electoral campaign to implement a “phased and responsible” North Sea transition, ruling out the issuance of new exploration licences.
Labour had also pledged to stop the controversial Rosebank oil and gas field, which is being challenged in court by environmentalists.
The future of Rosebank appears even more uncertain after a landmark decision by the UK Supreme Court, which earlier in June had ruled in favour of campaigners in their claim that environmental permits for upstream projects must keep into account end emissions arising from burning the fossil fuels produced.
The decision relates to the Horse Hill field, which had been granted planning permissions by Surrey County Council in 2019.
“The Supreme Court’s ruling is a game-changer, as it will affect all new large-scale oil and gas projects,” Friends of the Earth lawyer, Niall Toru, told Gas Outlook.
“The decision confirmed that environmental impact assessments, as required for planning permissions, must take the inevitable emissions from the use of oil or gas into account, even if these are emitted off-site.”
“Until now, the fossil fuel industry has argued they were not responsible for these emissions and that they were somehow not effects of their projects.”
“This was clearly wrong, and we welcome the Supreme Court’s strong confirmation of this.”
“Because of the ruling, new oil and gas projects cannot get the green light unless their full climate impacts have been assessed and made available for full public scrutiny,” he continued.
“The Surrey judgment is most likely to impact projects which are still going through the approvals process or which have already seen a government approval subject to a legal challenge,” Catherine Higham, policy fellow at the Grantham Research Institute on Climate Change and the Environment told Gas Outlook.
“It’s important to note that the judgment doesn’t prevent projects being approved: instead it says that the proponents have to calculate the scope 3 emissions for new projects and be transparent about it, and the government decision makers then need to consider these when deciding whether to approve the project.”
“What this does do is change the political optics of approving the project for the government,” she stressed.
“Quantifying emissions from these projects is likely to have an impact on how they are perceived by the public, and it may contribute to making it less likely they are approved.”
Stephen Sanderson, CEO of UK Oil and Gas, the company behind the project, said that the decision was “perplexing” and added this “underscores why the company’s focus over the past few years has shifted away from oil and gas and firmly towards creating and delivering strategic underground hydrogen storage, an essential element of the UK’s future low carbon energy system.”
And while the Conservatives had pledged to boost North Sea oil and gas production in response to the energy crisis, the sector is now facing a deteriorating outlook, with a potential halt to new oil and gas licences and a further windfall tax on the cards.
“The Labour Party manifesto stated clearly that they would not revoke existing oil and gas licenses but would stop issuing new licenses to explore new fields,” Esin Serin, a policy fellow at the Grantham Institute, told Gas Outlook.
“Now, the government must stick to its manifesto pledge and enable a just and rapid transition for the North Sea by driving investment into offshore energy sectors of the future such as floating offshore wind and carbon capture, usage and storage,” she said.
“New oil and gas production in the North Sea would not make any meaningful contribution to the UK’s energy security or to cutting energy bills, while contradicting the country’s efforts to move towards a net zero economy by 2050,” she added.
“The British public has just elected a pro-climate government that has pledged to end new oil and gas licensing,” Tessa Khan, executive director at Uplift, an organisation that lobbies for a fossil fuel-free UK, told Gas Outlook.
“If sites like Horse Hill are deemed unlawful, other new oil and gas projects should be too — including the enormous Rosebank oil field off the coast of Shetland, which will emit more CO2 than the world’s 28 lowest income countries combined do in one year.”
“Decisions to approve new fields have historically been made without taking into account their most significant environmental impact, which is the climate impact of burning the oil and gas reserves,” she continued.
“The Supreme Court’s ruling that decision-makers now need to have that information in front of them is simply common sense.”
“The judgment also makes it more likely that future decisions on new oil and gas projects will be more aligned with guidance from climate scientists and the International Energy Agency that makes it clear that new fossil fuel infrastructure is incompatible with a safe climate,” she said.