The UK Government has approved plans to begin drilling in the Jackdaw gas field in the North Sea.
The decision ends months of speculation about the future of the project, which owner Adura said could deliver around 6% of UK North Sea gas production.
Prime Minister Andy Burnham said the approval of the Jackdaw gas field will “protect hundreds of jobs and help keep millions of homes warm this winter” but insisted the Government remained “committed to moving towards renewable energy”.
The drilling project is one of two – alongside the Rosebank oil field off Shetland – which were approved by the previous Conservative government.
Drilling in the North Sea was opposed by environmental groups (Image: PA)
Both were approved for drilling licences in June 2022, but this was overturned by the Scottish courts after a challenge from environmental campaigners.
This came after a UK Supreme Court ruling that developers had to account for the climate impact caused by burning fossil fuels in their planning applications.
Fresh public consultations on the proposals took place this year and closed in August, and the Government gave the green light to Jackdaw on Wednesday morning.
A decision on Rosebank, the largest untapped oil field in the North Sea, is being made separately, with Energy Secretary Miatta Fahnbulleh saying it will take “a bit longer”.
The decisions are seen as a key test for Prime Minister Andy Burnham.
Mr Burnham previously said he would “take a pragmatic approach when it comes to the North Sea” since coming to power in the summer.
Speaking this morning, Mr Burnham said the Government remained committed to renewable energy but was taking a “pragmatic” approach to the North Sea.
He said: “I welcome the Energy Secretary’s decision, which will protect hundreds of jobs and help keep millions of homes warm this winter.
“At a time when people are really struggling, it’s right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help.
“We’re committed to moving towards renewable energy and reaching net zero by 2050.
“But even on our ambitious climate path, we’ll still require oil and gas as part of our energy needs for decades to come.
“That’s why we’re taking a pragmatic approach to the North Sea. We’re also establishing a new Energy Wealth Fund to invest in renewable energy, support the green transition and help reduce energy bills over the long-term.
“Our approach will ensure we can boost our energy security, back British workers, ringfence future North Sea proceeds to speed up the green transition, hit our ambitious climate targets and – crucially – bring down bills.”
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He has faced pressure from environmental groups to “stick to the spirit of Labour’s manifesto commitment” and refuse consent for either of the schemes.
The 2024 manifesto committed to issuing no new oil and gas licences for the North Sea.
However, proponents of Jackdaw and Rosebank within the party have argued that neither are new fossil fuel fields, given the wheels were in motion to tap them ahead of Labour coming to power.
The field will supply gas to homes by the end of the month, the UK Government said. (Image: Dominic Lipinski)
The Jackdaw field will start supplying gas to homes and businesses from the end of the month, the Government said after approving the scheme.
Energy Secretary Miatta Fahnbulleh said: “Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers.
“This decision will support the country’s energy security with homegrown gas this winter and help minimise the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear.
“The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050.”
Chancellor John Healey said a new Energy Wealth Fund would be used to funnel tax revenues from North Sea oil and gas into renewable and low carbon schemes.
The fund will have an initial £2 billion funding injection.
Mr Healey said: “I want Britain’s energy wealth to spark a new wave of clean power to work for the British people.
“Since North Sea gas and oil were discovered decades ago, the benefit of our existing nation’s natural resources have not been turned into the long-term investment our country needs.
“Through our new Energy Wealth Fund, we will invest in the clean energy industries of the future, creating jobs, driving growth and strengthening Britain’s energy security.”
Green Party of England and Wales leader Zack Polanski said the decision to approve Jackdaw was “climate vandalism”.
He said: “Today’s decision by Labour is a betrayal of all of our futures, Labour has abandoned all credibility in the fight against climate change.
“The Energy Secretary has herself said it will make no difference to energy bills, the Health Secretary has admitted the summer heatwave added to pressure on the NHS and the industry’s own assessment is that will create only 27 jobs.
“This is a victory for Shell over the people.”