Leaving oil and gas in the ground was always a pipe dream

Just call me Mystic Mac. As I forecast in this space earlier this month, the UK has finally opened the door to the development of the Rosebank oilfield off Shetland and the Jackdaw gas field off Aberdeen. Ed Miliband, the net zero secretary, famously said that drilling in these two modest reserves would constitute 'climate vandalism'. Well, it looks like he will shortly have to get his spray paint out and daub 'Just Start Oil' on the door of the Department for Energy Security and Net Zero.
To be honest, it didn't take supernatural foresight to predict that these totemic fields would ultimately get the go-ahead. They were given licences by the last government. Production was halted only by a bizarre judgment by the Court of Session in Edinburgh.
In January Lord Ericht ruled in favour of the climate activists, Uplift and Greenpeace, who argued that the UK government hadn't carried out a full environmental impact assessment of the emissions from the burning of fossil fuels downstream. It had merely provided an assessment of the carbon dioxide from the process of extracting it and piping it ashore. New methods of extraction can and are producing significant reductions in producer emissions. But the UK government had not formally included an assessment of the downstream emissions since it was deemed self-evident that burning hydrocarbons produces greenhouse gases.
What did the court expect? That it would be used to oil bicycle chains and fill balloons? Shell says that Jackdaw alone would produce enough gas to heat 1.4 million households. The environmental and health impact on those households of withdrawing their main source of heating was not, of course, considered in this pettifogging ruling — because that would have required an ounce of common sense. Nor did the court recognise that the gas, which would have to be imported to fuel those domestic boilers if Jackdaw were stoppered, might produce more emissions than using our domestic supply. Yet it should be patently obvious that shipping liquefied natural gas 3,000 miles from America by tanker is more profligate in emissions than using what's produced by extraction from our backyard.
The court was tacitly endorsing the perverse logic of the Scottish government and lobbyists such as Greenpeace that, in some morally inexplicable way, imported oil and gas is good while ours is bad.
But Sir Keir Starmer was never going to start shutting down an industry that generates about £25 billion a year, according to Offshore Energy UK, and supports around 100,000 jobs. Pointlessly sacrificing these new fields would only have indicated to the few companies still operating in the region that the government is hell bent on closing down the North Sea prematurely.
The new rules announced last week by Michael Shanks, the energy minister, will allow further development of the Cambo and Clair fields, expansion of which had also been placed on hold following the January court ruling. This whole episode served only to showcase the absurdity of what is being called the managerial 'lanyard class's' thinking about energy. The Treasury is not stupid and was never going to endorse an exercise in performative self-harm. Nor was No 10. 'Keeping it in the ground', as Patrick Harvie used to advocate, was not what Labour meant by a rational and measured transition to renewable energy. The UK depends on oil and gas for 75 per cent of its energy usage.
So the UK government has rejigged the approval process to include a statement of the bleedin' obvious — viz, that burning oil and gas produces emissions. Industry sources believe, rightly, that by submitting this new and more politically correct prospectus, they will be able to go ahead.
That is, if firms like Equinor haven't given up in disgust. They're already being hit by a 78 per cent profits tax on North Sea oil, which makes you wonder why they bother. It's not as if the oil price is exactly soaring right now, despite the nasty business in the Strait of Hormuz. Companies such as Harbour Energy have given up and pulled out. Norwegian-owned Equinor, in Rosebank, is hanging on, presumably in the hope that it will be well placed to bid for future wind farm development. It installed the first commercially viable floating wind farm, Hywind, off Peterhead.
All of which underlines the lamentable state of our whole approach to energy. Oil companies, demonised by the environmental lobby, happen to possess the very skills and technology which will be needed if and when the green energy bonanza finally materialises. Greenpeace seems to think the wind energy in the North Sea can be harnessed by Native American dream-catchers and transmitted into people's homes by daisy chains. In fact it requires heavy-duty platforms, implanted in turbulent waters, to support wind turbines the size of the Eiffel Tower — and also the laying of undersea cables to get it to the grid (if it can be upgraded in time). This is not very different, technologically, from what fossil fuel companies have been doing for the past 50 years.
Rosebank and Jackdaw are not going to solve the UK's strategic energy deficit. They are rather modest operations in a North Sea field that is in steep and irrevocable decline. The glory days are over. But we still need whatever they can provide, if only to ensure a measure of energy security and help reduce costly imports.
One of the more specious arguments currently deployed by opponents of Rosebank and Jackdaw is that their hydrocarbons will be exported and are therefore of no use here. Not so: gas goes directly to the UK. Oil is mostly exported to Rotterdam for refining, but it comes back as petrol and other products. It isn't refined here because we've closed nearly all our own refineries, such as Grangemouth, because of our perverse belief that it is morally preferable to import hydrocarbons.
Abandoning the North Sea won't bring forward net zero by a single day. It will merely increase our dependency on authoritarian governments in the Middle East, make energy bills even more unaffordable, and deprive the UK of billions in oil revenues to spend on the NHS.
Predictably, the Scottish government has not responded to the energy U-turn. The SNP is still under the sway of environmental cretinism. No wonder Fergus Ewing, a voice of energy sanity, has decided to walk. Perhaps Ed Miliband may be following him in the not-too-distant future.

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