LONDON – Britain on Wednesday gave the go-ahead for a major oil and gas project in the North Sea, ignoring warnings from scientists and the United Nations that countries must stop developing new fossil fuel resources if the world is to avoid catastrophic climate change.
The North Sea Transition Authority approved development of the Rosebank field, allowing owners Equinor and Ithaca Energy to move forward with the project about 130 kilometers (80 miles) northwest of the Shetland Islands. The authority is a U.K. regulator charged with both maximizing the economic benefits of Britain’s North Sea energy resources and helping the country meet its goals for reducing carbon emissions.
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The decision comes as Prime Minister Rishi Sunak's government faces criticism for watering down its environmental commitments ahead of an election that is expected to take place next year. Sunak recently delayed a ban on gasoline- and diesel-powered vehicles and proposed easing water quality rules for developers after expensive environmental programs proved unpopular with some voters.
The government argues that Britain needs projects like Rosebank to bolster domestic oil and gas production, control costs for consumers and provide “energy security” as the country makes the transition from fossil fuels to renewable energy sources such as wind and solar.
Caroline Lucas, the only Green Party member of the House of Commons, called the decision “morally obscene” at a time when the climate emergency is getting “more and more serious.”
While Britain needs to continue pumping oil and gas from existing projects, it shouldn’t be opening up new fields, she said.
Lucas also said Rosebank wouldn’t boost energy security or bring down bills because most of the oil will be shipped overseas and whatever comes back to Britain will be sold at market prices.
“Energy security and cheaper bills aren’t delivered by allowing highly subsidized, foreign-owned fossil fuel giants to extract more oil and gas from these islands and sell it overseas to the highest bidder,” she said.
Sunak in July announced plans to issue hundreds of new oil and gas licenses to protect jobs and make Britain more energy independent as production declines at the country’s aging North Sea oil fields.
Production from Britain’s North Sea fields, which were first developed in the early 1970s, has declined steadily over the past quarter century. The fields produced the equivalent of about 1.3 million barrels a day in May, down 75% from the peak in December 1996.
One of the largest untapped deposits in U.K. waters, Rosebank holds an estimated 300 million recoverable barrels of oil, Equinor said.
Norway-based Equinor, which owns 80% of Rosebank, said the two partners plan to invest $3.8 billion in the project, supporting about 1,600 jobs at the height of construction. The first phase of the project will begin producing in 2026-2027.
The government argues that Rosebank and other new projects will be “significantly less emissions intensive than previous developments.”
“Continued North Sea production is important for maintaining domestic security of supply and making the U.K. less vulnerable to a repeat of the energy crisis that caused prices to soar after Russia’s illegal invasion of Ukraine,” the government said.
Sunak last week delayed the government’s plan to ban sales of new gasoline- and diesel-fuel cars until 2035, five years later than previously scheduled.
That came after Sunak’s Conservative Party capitalized on voter anger over a new emissions charge for drivers in London to win the by-election to fill a vacant seat in the House of Commons. Since then, re-examining environmental programs has become an important issue for the party, which trails in most opinion polls after 13 years in power.
The government says it still aims to achieve its target of eliminating net carbon emissions by 2050.
“We are investing in our world-leading renewable energy but … we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank,” Energy Secretary Claire Coutinho said in a statement.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said recent decisions raise questions about the government's commitment to its environmental targets, which may prompt companies to delay needed investments in renewable energy.
“It muddies the playing field again when it comes to government support for the green transition'' and "leads to more uncertainty for companies and investors focused on cleaner energy solutions,” she said.
Energy companies approved $166 billion of investment in new oil and gas projects from January 2021 through March 2022, according to research by Carbon Tracker, a think tank focused on tracking decisions that contribute to climate change.
That comes as the U.N.’s panel on climate change says countries must end new fossil fuel exploration and production to preserve hopes of keeping global warming to no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) over pre-industrial levels.
“Fossil fuel industry transition plans must be transformation plans that chart a company’s move to clean energy — and away from a product incompatible with human survival,” U.N. Secretary-General Antonio Guterres said in June. “Otherwise, they are just proposals to become more efficient planet-wreckers.”