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Sir Keir Starmer and Rachel Reeves want two new controversial oil and gas fields in the North Sea to go ahead despite concerns among Labour MPs and environmentalists about the huge carbon emissions from the projects.
Last week Scotland’s top civil court revoked consents for Shell’s Jackdaw gasfield and the £3bn Rosebank project being developed by Norway’s Equinor and the UK’s Ithaca Energy.
The developers are expected to apply for new permissions after the government issues guidance on how applications should be considered given a 2024 Supreme Court ruling that said emissions from burning fossil fuels must be included during environmental impact assessments.
“Our position is clear, we have supported these fields,” said one ally of Starmer. “The problem has arisen because the previous government’s regime was found to be unlawful. The new applications will have to pass the new regime but our position on existing fields is very clear: we support them.”
Equinor chief executive Anders Opedal told the Financial Times that he expected the government to back the project given Labour’s promise to allow existing oil projects to go ahead even as it blocks new exploration.
“We do expect that the government will move forward with this project,” he said. Last month’s court ruling had allowed development work to continue, he said, adding that Rosebank remained “on track” to start production in 2027.
Philippe Mathieu, the Equinor executive ultimately in charge of Rosebank, said the company was in “continuous and constructive” dialogue with the energy department, DESNZ.
He said Equinor expected to receive clarity on the new regulatory requirements by April and would then submit a new environmental impact study.
Rosebank is the UK’s largest undeveloped oil reserve and is thought to contain 500mn barrels of oil.
The Court of Session ruling last week said permissions granted for Jackdaw in 2022 and Rosebank in 2023 had to be reconsidered because of the Supreme Court ruling in a separate case known as Finch.
The ruling has threatened to jeopardise the government’s tightrope approach to North Sea oil and gas.
Ed Miliband, energy secretary, in 2023 — when Labour was in opposition — described the licence issued to Rosebank as “a colossal waste of taxpayer money and climate vandalism”.
But Reeves said last week that “we were really clear in our [election] manifesto that we would honour all existing licences including at Rosebank and Jackdaw and we will stick by those commitments”.
Clive Lewis, a Labour MP, told the BBC that Britain “has an opportunity to show global leadership” on climate policy, “that’s what Brexit was all about”.
“We’re meant to be a social democratic government that has climate commitments, it’s time we stepped up and lived up to those commitments that we made to the British public just a few months ago.”
The government is currently drawing up new guidance for environmental impact assessments in response to the Finch decision, which will be published in the spring. The guidance is expected to set the bar higher for fossil fuel projects.
The energy companies will then have to resubmit environmental impact assessments to the Offshore Petroleum Regulator for Environment and Decommissioning, a quango which answers to Miliband.
People familiar with the government’s thinking said Labour will stick to its manifesto pledge to end exploration in new fields although there could be some “wriggle room” for operators. “Some [environmental] people won’t like it,” said one.
However DESNZ has delayed the publication of this new consultation amid broader government concerns on how it will be seen in the US, where Donald Trump is an avowed supporter of fossil fuels.
Although the Labour government is committed to achieving net zero carbon emissions by 2050, the UK’s trajectory would still involve burning huge — albeit declining — amounts of fossil fuels over the next 25 years.
“The government has consulted on guidance to provide certainty for the industry. Oil and gas will be with us for decades to come,” a Downing Street spokesman said.
“We are committed to managing the North Sea and existing oilfields. Once we’ve issued that guidance, developers will be able to get back to applying for consents under this revised regime.”
Meanwhile the government is poised to publish a consultation on how its new North Sea oil and gas licensing regime will operate with the long-awaited restrictions on new exploration.
