Energy Secretary Leans Toward Rejecting Rosebank Oilfield, Because Apparently Exporting Oil Isn't a Climate Strategy

In a development that has North Sea oil executives reaching for their stress balls and climate campaigners reaching for their champagne, Energy Secretary Miatta Fahnbulleh is reportedly leaning toward rejecting the giant Rosebank oilfield, the Guardian understands. The decision would be a blow to the North Sea energy industry and a major victory for green campaigners who have spent years arguing that new oil extraction is incompatible with, you know, a habitable planet.

Officials say Fahnbulleh is minded to refuse approval for Rosebank, which would be one of the biggest oilfields in the North Sea. The news comes just days after she approved the smaller Jackdaw gasfield on Wednesday, a move that prompted protests from parts of the green movement and presumably some very strongly worded letters.

But Fahnbulleh told the Guardian that the rationale behind Jackdaw doesn't apply to Rosebank. The UK will rely on gas as it transitions to net zero, she argued, and it's better to take it from relatively low-carbon North Sea sources than to import it. "One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export," she said. "It is right that we judge each application in its own right, and it is absolutely critical that the decision is consistent with our climate obligations, our carbon budgets and the end destination we need to get to with the energy transition." Which is a diplomatic way of saying: gas for us, oil for someone else's problem.

Officials say Fahnbulleh has not yet taken a final decision on Rosebank, but a ruling is expected later this year. The field would emit about seven times the carbon of Jackdaw, and Fahnbulleh is understood to believe it would do less for UK energy security, given that most of the oil would be exported. In other words, it's not just a climate problem - it's a climate problem with a mediocre ROI.

On a visit to Aberdeen, Fahnbulleh said she was satisfied that Jackdaw - due to begin producing gas within weeks and expected to add an estimated 36m tonnes of carbon emissions - would not violate the UK's climate commitments. "As we make the transition, we are going to need gas," she said. "At a point when we have got conflict in the Middle East that is triggering an energy crisis, energy security is vital, and homegrown energy is key." She did, however, concede that Jackdaw would not help achieve the government's main energy target of bringing down bills, admitting: "This is not about bills." A rare moment of honesty in politics, albeit one that might not play well with households staring at their energy statements.

The timing is awkward for more than one reason. The UN Environment Programme has recommended that global carbon emissions be cut by nearly a fifth in the next four years, and by close to half within a decade, to avoid overshooting climate targets by a disastrous margin. Approving new oilfields while lecturing the world about emissions reductions is, to put it gently, a tricky needle to thread.

Fahnbulleh has promised that future revenues from the North Sea will be spent on green energy projects through a new energy wealth fund. The fund will be given £2bn in the budget, she said, some of which will be reallocated from other parts of her department's budget. "When we have tax revenues that are coming from the oil and gas industry, it is right that we invest that in the transition we need to make in energy," she said, adding that the money would go toward renewables, nuclear and other clean energy schemes. She could not, however, say exactly which tax revenues would be given to the new fund, or how much it might generate. "The chancellor will make those details clear in the budget," she said - a sentence that has never inspired confidence in the history of fiscal policy.

While Labour's 2024 election manifesto committed to a ban on new drilling licences in the North Sea, the companies behind Jackdaw and Rosebank have sought approval for existing licences. They resubmitted their applications for environmental approval earlier this year. The Jackdaw field will start supplying gas to homes and businesses from the end of the month, the government said after approving the scheme.

Asked how confident he was that Rosebank would be approved, Neil McCulloch, chief executive of Adura, one of the companies behind the plans, told the Press Association: "We're very confident now." He added: "We've seen a decision made that there is a process that can result in a decision, but it's a matter for the secretary of state and her team to examine the two fields separately. But we believe we've done as good a job in arguing our case with Rosebank as we did with Jackdaw." He noted that "the economic benefits of Rosebank are different. It's a bigger field. It will last longer than Jackdaw, and so I'm sure she'll take that into account when she makes her decision in terms of the jobs and economic impact for the UK." Confidence is a wonderful thing, right up until it meets a carbon budget.

The Jackdaw announcement could boost Labour's position in north-east Scotland, where much of the industry is based and where unions have been campaigning heavily for the permits. But it is likely to cause angst among some Labour MPs, especially those in seats where they face a challenge from the Green party. A poll by Savanta for the climate group E3G, seen by the Guardian, found that nearly a third of voters say they would be less likely to vote Labour if it gave the go-ahead for more North Sea oil drilling. That includes almost exactly a third of those who voted Labour at the last election, and about half of 18- to 24-year-olds. In other words, the youth vote is watching, and it has opinions about oilfields.