Consent for Rosebank and Jackdaw oil and gas fields was unlawful

A court has ruled that consent for two new Scottish oil and gas fields was granted unlawfully and their owners must seek fresh approval from the UK government before production can begin.

The written judgement on the Rosebank and Jackdaw fields came after a case brought by environmental campaigners, Uplift and Greenpeace, at the Court of Session in Edinburgh.

In his judgement, Lord Ericht said a more detailed assessment of the fields’ environmental impact was required, taking into account the effect on the climate of burning any fossil fuels extracted.

He said work on both fields could continue while the new information was gathered but no oil and gas could be extracted unless fresh approval was granted.

Shell’s Jackdaw gas field in the North Sea was originally approved by the previous UK Conservative government, and the industry regulator, in summer 2022.

Permission for the Rosebank oil development, 80 miles west of Shetland in the North Atlantic, was granted in autumn 2023.

In a 57-page judgement, Lord Ericht wrote that there was a public interest in having the decision “remade on a lawful basis” because of the effects of climate change – which he said outweighed the interests of the developers.

Tessa Khan, executive director of Uplift, welcomed the ruling as “common sense” and said the government should now refuse approval for both projects.

“The climate science is crystal clear that we can’t create new oil and gas fields if we’re going to stay within safe climate thresholds,” she said.

The companies involved insist their projects are vital for UK energy security and should be allowed to proceed.

Rosebank contains an estimated 300 million to 500 million barrels of oil, making it the largest known untapped field in UK waters.

Norwegian state energy giant Equinor has an 80% stake in Rosebank with Aberdeen-based Ithaca Energy owning the rest.

The plan was for oil to be taken off by tanker and sold on the international market, with some gas being piped to Shetland.

Production was scheduled to begin at Jackdaw in 2026 and at Rosebank in 2026/27.

As part of the original consenting process, environmental impact assessments were carried out to identify, describe and assess “the direct and indirect effects” of the projects.

Those assessments took into account emissions generated by the process of extracting oil and gas but not the greenhouse gases which would be released when those fossil fuels were eventually burned – known as “downstream” or “Scope 3” emissions.

But last June, in a dispute about oil wells near London’s Gatwick Airport, the UK Supreme Court ruled that environmental impact assessments must also include downstream emissions.

Now Lord Ericht has ruled that the decision in that case – Finch v Surrey County Council – should apply retrospectively to Rosebank and Jackdaw.

As a result, Energy Secretary Ed Miliband and the regulator, the North Sea Transition Authority (formerly known as the Oil and Gas Authority), must reconsider whether or not to grant consent, taking into account those downstream emissions.

Charlie Kronick of Greenpeace said granting approval would be inconsistent with meeting the UK’s national and international targets to reduce carbon emissions.

“There is no way that we can meet those targets by approving new oil and gas,” he said.

Oil firms insist there will still be domestic demand for fossil fuels whether it is produced in UK waters or not, arguing that importing gas would produce higher emissions.

The UK government has been considering how to calculate downstream emissions, and a consultation on the subject had been due to conclude in the spring.

Downing Street said it “worked at speed to consult on updated environmental guidance so we can provide certainty to industry” since the autumn.

The prime minister’s official spokesperson told reporters at a daily Downing Street briefing that: “This will help provide stability for industry, support our environmental goals and investment, protect jobs and deliver economic growth”.

The spokesperson added “Oil and gas will be with us for decades to come, but diversifying the North Sea industries is also key to protecting jobs and investments in the long term, alongside our commitment to manage existing fields for the duration of their lifespan.”

A spokesperson for Shell said swift action was needed from the government to grant fresh approval for Jackdaw, adding: “Today’s ruling rightly allows work to progress on this nationally-important energy project while new consents are sought.”

Equinor said it welcomed the ruling and promised to continue to work closely with government to progress it.

“Rosebank is critical for the UK’s economic growth,” a spokesperson said, adding that it was investing £2.2bn in the project and a pause would have meant job losses and a cut in tax income for the Treasury.

In court, counsel for Shell had argued that quashing consent could threaten the overall viability of Jackdaw, not just costing the company and its partners huge sums of money but also impacting UK energy security, the transition to renewable energy and the wider economy.

However, Lord Ericht concluded that these were not matters for him, writing: “The question for me is not whether the projects should go ahead, but whether the unlawful decisions should be retaken in a lawful manner.”

He also rejected arguments from the companies that they had acted in good faith because the UK government had told them there was no need to include downstream emissions in their environmental assessments.

“Shell, Equinor and Ithaca,” wrote Lord Ericht, “knew or ought to have known at the time that the consents were granted that the law was uncertain.”

Shell has already spent £800m on Jackdaw, which it says will employ “at least 1,000” people between 2023 and 2025, and account for about 6% of future North Sea gas production, providing enough energy to heat 1.4 million homes, and reducing the need to import energy from abroad.

The platform is currently in a fabrication yard at Verdal near Trondheim, Norway and is due to be lifted onto a barge and towed into place in the next few months.

BBC News visited the yard earlier this month and witnessed engineers making final adjustments to a vast and complex array of shining pipes, valves and dials.

On a misty and mild winter’s day, the platform loomed up beneath a giant red and white crane, boasting a gleaming aluminium helipad and a bright orange lifeboat.

The structure to support the platform, known as a jacket, is already on the seabed 150 miles east of Aberdeen.

Several Norwegians we spoke to on our brief visit to Verdal, some 200 miles south of the Arctic Circle, said the weather was remarkably warm for January.

This would be no surprise to climate scientists who have pointed out that Norway is home to some of the fastest-warming places on earth.

In court last year, Shell’s lawyer, Christine O’Neill KC, said the company accepted that greenhouse gas emissions contributed to climate change and urgent action was needed to tackle it.

However, she added, “whether, how and to what extent” any individual project contributed to climate change was “a complex one.”

In his judgment, Lord Ericht wrote: “The effect of the burning of fossil fuels on climate change and the lives of individual persons is now well recognised in law.”

The judge has now, in effect, batted the case out of the judicial arena and into the wilds of politics, where the landscape has shifted even in the two months since verbal arguments in the case were heard in Edinburgh.

Republican Donald Trump is now back in the White House promising to “drill, baby, drill” while Labour chancellor Rachel Reeves is stressing economic growth over environmental concerns as she backs airport expansion.

There has been speculation that Ed Miliband is uncomfortable with this position but he has not broken ranks.

On the other hand, the oil industry says it is already facing difficult conditions because of political uncertainty and high levels of taxation, with the US firm Apache recently announcing it would leave the North Sea by the end of 2029.

Given that backdrop, Shell is now understood to be pressing government in private for assurances about Jackdaw.

“The addition of downstream emissions will add to the assessment process a new and significant factor which was not included on the previous assessment and may change the result of the assessment,” wrote Lord Ericht.

If it does, that would delight climate campaigners and dismay the oil companies but industry insiders have told BBC News it is more likely that, in the end, the government will allow both Rosebank and Jackdaw to proceed.