Hours after approving the Jackdaw gas field , Energy Secretary Miatta Fahnbulleh has told The Herald that Britain needs "homegrown gas" to weather volatile foreign markets, promising there will be no delay on a decision for the even larger Rosebank development.
Speaking in Aberdeen to confirm the green light for the site 150 miles offshore, the minister defended the move which has been heavily criticised by environmental groups.
Jackdaw—operated by Adura, the joint venture between Shell and Equinor—will boost UK gas production by around 6% over an 11-year lifespan, with the first supplies due to flow within weeks.
Read more
- 'Great news for Aberdeen': Donald Trump applauds approval of Jackdaw gas field
- Beyond Jackdaw's 27 jobs: The £2.1bn prize for North Sea supply chain
- WATCH: Speaker blasts ‘shameful’ handling of Jackdaw gas field announcement
The decision on the development has been a long time coming.
Last year, the Court of Session voided permits for Jackdaw and Rosebank issued by the previous Conservative government , ruling that the original decisions to greenlight the projects were unlawful because they did not take into account the climate impact of burning the extracted oil and gas.
That forced Adura to reapply for new licences . Labour's manifesto promised no new licences, but the party said it would honour existing ones.
Asked if she was worried some Labour voters would feel betrayed by the decision, which environmental groups have argued breaches the spirit of Labour's manifesto, Ms Fahnbulleh said: "I don't think so. The manifesto was really clear: no new licensing, but we would manage existing fields for their lifetime, and that is what we are doing.
"And the thing I'd say to anyone that is looking at this and is worried about the climate dimension, I was really clear in assessing this. This is consistent with our climate obligations, and it doesn't change the end destination."
Ms Fahnbulleh said energy security was her first consideration and that the conflict in the Middle East and the energy crisis it triggered had reinforced the importance of North Sea gas that could reach homes and businesses within weeks.
The minister added that she could attach conditions to limit emissions from production, which she could not do with imports: "So it's a choice between homegrown gas, where I can set conditions to make sure it's being produced with the lowest possible emissions, or it's importing oil and gas from abroad, and that can often be far more carbon intensive."
Ms Fahnbulleh said the Government had unlocked £100 billion of private clean energy investment in the last two years and had approved enough renewables and nuclear to power 23 million homes.
But she said gas would still be needed for some time: "We are transitioning, and in that transition, we're going to need gas.
"And so, better homegrown gas that is part of our energy security in a really volatile world than gas or oil that we import from abroad."
Ms Fahnbulleh will next decide on Rosebank, the oilfield west of Shetland, which may be a far harder sell for some in Labour than Jackdaw.
According to reports , Ms Fahnbulleh is minded to refuse the development. However, she told The Herald the decision would be based on the evidence and the tests that apply.
Asked when a decision would come, the minister blamed the previous Tory government for the legal difficulties that led to both fields being reconsidered.
"We're moving as quickly as we can," she said. "So my key thing is that we just have to crack on, and so we're not going to delay. I want to get to a decision, but we've got to do the process properly. So part of the reason we're in this mess is that the last government didn't do the process properly."
She said she would weigh all the consultation evidence: "It's quasi-judicial. We've got to go through all the consultation, all the evidence we've been given, and then I will look at the evidence and make a decision based on the tests that will apply."
Scottish Secretary Douglas Alexander, Energy Secretary Miatta Fahnbulleh and Chancellor of the Exchequer, John Healey during a visit to Shell UK's St Fergus Gas Terminal (Image: Paul Reid/PA)
Wednesday also saw the UK Government unveiled a new Energy Wealth Fund, with extra tax revenues from North Sea oil and gas to be directed into clean energy projects.
First Minister John Swinney has written to Prime Minister Andy Burnham welcoming the fund, but argued that payouts should be ringfenced for offshore renewables in the north-east of Scotland, and questioned why the initial £2 billion injection seemed to be only around half of last year's North Sea revenues.
The Scottish Government did not explicitly welcome the decision on Jackdaw, but said it hoped the approval would provide some certainty for the north east.
Ms Fahnbulleh said: "I don't necessarily expect anything of the Scottish Government. They're opposing nuclear, despite the fact that it will unlock huge amounts of jobs and be critical to our energy security."
She added: "In the end, I'm the person that is responsible for the energy security of this country. I can't sit on the fence, I've got to make decisions.
"And against the backdrop of the Middle East, if you can produce your own homegrown gas at a point that everyone, even our climate watchdog recognises that we need gas, why would you not do that?
"So I don't have the luxury of sitting on the fence. I've got to get on with it. But I'm really clear: energy security, but whatever we do must be compatible with our climate obligations because we are very clear about the end destination, which is net zero, and everything we do is within that framework."
The Herald also asked the Secretary of State about the Energy Profits Levy.
Effectively, firms in the sector pay Ring Fence Corporation Tax of 30%, a supplementary charge of 10% and the EPL at 38%. It is due to end in 2030 and be replaced by the Oil and Gas Revenue Levy.
It is one of the industry's biggest concerns.
Asked whether to expect news on it in the Budget, Ms Fahnbulleh said tax was a matter for the Chancellor, John Healey, and she could not get ahead of his statement to the Commons next week.
She said her priority was workers: "We're trying to work really closely with industry because at the heart of this are workers and our North Sea workers, and I am hugely conscious that for many people in Aberdeen, across the North East, but all the way to Humber, there has been huge frustration at job losses because there hasn't been a plan for our workforce.
"There hasn't been a plan that says, look, how can we secure jobs? How can we create new jobs for people to transition in? Because it is a declining basin, and what is the role of government to smooth over and support that transition? That is something that we are absolutely clear that we need to do, and we are committed to getting on with."
Read more
- Jackdaw was the easy part – now comes the real North Sea headache
- UK Government approves North Sea Jackdaw gas field drilling project
- Rare green jobs boost offers fresh evidence in North Sea transition debate
Asked whether a plan was being developed, given concerns that more jobs would be lost than created, she said: "Yes, there is. And look, the work that we're doing with the North Sea Futures Board, the work that we're doing with both the unions and the industry looking at jobs, both the quality of jobs, by the way, but also the new jobs will be created.
"We will be driving that forward. But I'm really clear, and one of the reasons why the Energy Wealth Fund is so important is that it will allow us to accelerate investment in things like renewables, offshore wind, carbon capture and storage."
She admitted progress had been too slow: "We're not seeing the jobs. We're not seeing them quick enough, and we absolutely know that we need to accelerate that."