Former Conservative Treasurer Lord Michael Spencer. Credit: LBC / YouTube
Michael Spencer, who has donated millions to the Conservative Party, is the largest shareholder in North Sea exploration firm Deltic Energy.
A company whose largest shareholder is a former Conservative treasurer and major party donor has been awarded two new North Sea exploration licences, DeSmog can reveal.
It was announced on Wednesday (31 January) that Deltic Energy had been awarded the new licences in the latest North Sea oil and gas licensing round.
Conservative peer Michael Spencer currently holds an 18.8 percent (£4.5 million) stake in the firm.
Spencer has donated over £6 million to the Conservative Party since 2005 and was appointed to the Lords by Boris Johnon in September 2020. The billionaire financier is a former party treasurer and raised an estimated £70 million for the Tories between 2006 and 2010. He currently serves as a director of the Conservative Party Foundation – the party’s multi-million pound endowment fund, created under his watch in 2009 to manage “legacy funds to support the long-term finance” of the party.
The Guardian and the Good Law Project also revealed today that EnQuest Heather, a subsidiary of EnQuest,` had been awarded a new oil and gas licence. EnQuest Chief Executive Officer Amjad Bseisu has donated nearly £500,000 to the Conservative Party in the last decade and has lobbied to maximise oil and gas exploration in the North Sea.
DeSmog revealed in May 2023 that EnQuest had been awarded licences to explore carbon dioxide storage under the North Sea.
Jolyon Maugham, executive director of the Good Law Project told DeSmog that: “The Electoral Commission records these contributions as donations to the Conservative Party. But, given the extraordinary correlation between donations to the Tories and valuable awards from the government, I wonder whether it would be more accurate to brand them as investments?”
Both personally and through his family office IPGL, Spencer has donated more than £100,000 to the Conservative Party and its candidates since Rishi Sunak became prime minister in October 2022.
Sunak has been advocating forcefully for North Sea oil and gas exploration in recent months, saying that the UK plans to “max out” the UK’s reserves. In addition to its two new licences, Deltic currently has interests in five licences covering nine North Sea areas, known as blocks. New licences were also awarded this week to fossil fuel giants Shell and Equinor.
“Rishi Sunak’s obsession with doling out new North Sea licences now starts to make some sense,” Tessa Khan, executive director of Uplift, told DeSmog. “It’s clear there is no public benefit from the policy… But new fields could make a tidy little profit for a handful of oil and gas executives and their shareholders, including Conservative Party donors.”
Through the Offshore Petroleum Licensing Bill, passed by MPs last week, the government is attempting to bind future administrations to annual North Sea oil and gas licensing rounds.
This is despite the International Energy Agency stating that new fossil fuel exploration is “incompatible” with the Paris Agreement target of limiting global heating to 1.5C.
This week, the Climate Change Committee – the independent body that advises the government on its net zero policies – warned that mixed messages, including new fossil fuel projects, have damaged the UK’s international climate standing.
Spencer told DeSmog that: “I believe it is totally in the best interest of the UK to replace imported oil and gas by energy extracted from our own North Sea.”
North Sea gas carries higher emissions than imports from Norway, while there is no guarantee that oil and gas extracted under the new licences will be used to supply the UK, given that it is mined by private companies that sell it on the open international market.
Khan added that: “new drilling won’t make any difference to our bills, which ministers have admitted; it won’t boost energy security in that the UK has burned most of its gas; and it won’t provide a secure future for the workforce, which has halved in the past decade despite hundreds of licences being issued.
“The prime minister now needs to come clean with the public on any discussions he’s had with Spencer, or any of his party’s other oil and gas donors,” Khan said. “Sunak cannot continue to privilege the short term interests of a few, rich oil execs over the needs of millions of ordinary people who are struggling to afford to heat their homes.”
North Sea licences are awarded by the North Sea Transition Authority, a non-departmental public body owned and funded by the Department for Energy Security and Net Zero. There is no evidence that Deltic or Spencer used political contacts to secure the licences.
According to the NSTA, licensees have to “meet certain financial criteria” and meet the adequate “technical capability”, but there is no published guidance on avoiding conflicts of interest.
The NTSA, Deltic and EnQuest declined to comment on the record. The Department of Energy Security and Net Zero has been approached for comment.
Spencer and Deltic
Spencer has a number of oil and gas interests. His House of Lords register of interests shows that he has a stake in Pantheon Resources, a UK company exploring for oil in Alaska, and Cluff Energy Africa, described as an “early stage oil prospecting company seeking licences in Africa (Angola and Sierra Leone)”.
Until December last year, Spencer also held shares in Petrofac, an oilfield services firm heavily involved in the North Sea, including the controversial Cambo project.
Spencer has publicly advocated for the fossil fuel industry. He told LBC’s Nick Ferrari last September that the UK “sadly has opposed further investment in North Sea oil and gas”. Spencer used the interview to praise then Prime Minister Liz Truss for opposing windfall taxes on the sector, calling them “not Tory policy” and “not pro-business”. He has also expressed support for the controversial policy of fracking for shale gas.
Spencer is the chair of the Centre for Policy Studies, an influential Conservative think tank whose director was the co-author of the 2019 Tory manifesto. A number of fellow board members have financial interests in oil and gas firms.
The Conservatives received £3.5 million from polluters, fossil fuel interests, and climate deniers in 2022, and took over £400,000 from individuals and companies in the fossil fuel industry in 2020 and 2021 as the government weighed up decisions on North Sea oil and gas licences.
Major fossil fuel firms have committed tens of millions in finance to UK universities since 2022, DeSmog can reveal.
Many of these commitments have been accepted by institutions that have actively pledged to divest from oil and gas companies.
According to freedom of information requests submitted by DeSmog, more than £40.4 million has been pledged to 44 UK universities by 32 oil, coal and gas companies since 2022 in the form of research agreements, tuition fees, scholarships, grants, and consulting fees.
Most of the funding spans the current academic year, with a handful of projects running for a number years, up to as far as 2027.
The largest contributors were Shell, Malaysian state-owned oil company Petronas, and British Petroleum (BP). These three companies account for over 76 percent of the total figure awarded, having committed £20.98 million, £5.19 million, and £4.89 million respectively.
A further 10 companies made up nearly 20 percent of the remaining contributions during this period: Sinopec, Equinor, BHP Group, Total Energies, Eni SPA, Saudi Aramco, ExxonMobil, Kellas Midstream, Ithaca Energy, and Chevron.
Previous reporting from openDemocracy and the Guardian found that, between 2017 and December 2021, £89 million had been given to UK universities from some of the world’s biggest fossil fuel companies.
These partnerships have shown no sign of abating. DeSmog’s research shows an additional £40 million committed by fossil fuel firms since 2022, despite pledges from 102 higher education institutions to divest from the industry.
The universities in receipt of the most money were: Exeter, Imperial College London, Heriot-Watt, Manchester, Cambridge, Oxford, Royal Holloway, Queen Mary London, and Teesside.
“Young people care so deeply about protecting the planet because their futures are on the line,” said Green Party MP Caroline Lucas. “Yet fossil fuel giants are putting that future at risk with their planet-wrecking pollution, and then attempting to youthwash their reputation by handing over dirty money to universities”.
“If we’re going to tackle the climate emergency and secure a liveable future for the next generation, educational institutions should cut all ties with fossil fuel companies immediately.”
These figures do not include a total for Durham University, which declared that it had research agreements involving fossil fuel firms totalling £1.7 million but did not declare the sums that the oil and gas firms had contributed to these agreements.
These figures also do not include the amount held in fossil fuel investments by these universities. Our research indicates that at least 18 higher education institutions held direct investments in 25 fossil fuel companies over the relevant time period, collectively worth a further £8.1 million.
Many top universities also hold stakes in high-value pooled investment funds that are pouring hundreds of millions into fossil fuel giants. Research conducted by the student campaign group People & Planet estimates that, as of July 2022, as much as £319 million was still held in these funds by universities across the UK, including some institutions that have made promises to divest.
More than 65 percent of the country’s higher education institutions have refused to make further fossil fuel investments. This would potentially remove £17.7 billion from the reach of the industry, while 51 universities have yet to divest from oil and gas
Laura Clayson, climate campaigns manager at People & Planet, told DeSmog: “we say to those 51 universities left to divest: the student movement will remain unwavering in its demands for justice until our victory list includes every single one of you.”
The Leaderboard
The University of Exeter has received the most from fossil fuel firms since 2022, having signed a £14.7 million, five-year deal with Shell in November, as revealed by Byline Times. The project is to work on “carbon storage and sequestration”, and continues a 15-year relationship between the university and the oil giant.
According to the contract award notice, the project is part of a “wider Shell-led research programme focused on sequestration which aligns with Shell’s target to be a net-zero emissions energy business by 2050”.
Last year, Shell produced only 0.02 percent of its energy from renewable sources, analysis by Greenpeace has revealed. The company also recently abandoned plans to cut oil production by 1-2 percent each year until 2030, and will be investing £33 billion in oil and gas production between 2023 and 2035, compared to just £8-12 billion in “low-carbon” products.
Shell claims that it has reduced oil production more quickly than expected, though the company’s planned emissions between 2018 and 2030 are estimated to account for nearly 1.6 percent of the global carbon budget.
A spokesperson for the firm said: “We remain committed to becoming a net zero emissions energy business by 2050… It remains our view that global energy demand will continue to grow and be met by different types of energy – including oil and gas.”
New research from the University of Queensland shows that more than half of the world’s top fossil fuel producers will fail to meet climate targets unless they expand plans to decarbonise, while a major report from the UN has warned that the world will miss its climate targets unless it commits to “phasing out all unabated fossil fuels”.
A University of Exeter spokesperson said that its work with Shell will “contribute to the global race to net zero.”
Imperial College London has received the second most from fossil fuel firms since 2022. This follows a long association with oil and gas giants, which gave £54 million to the university between 2017 and 2021.
A spokesperson for Imperial told DeSmog that it pledged in 2020 it will only engage in research partnerships “with fossil fuel companies where the research forms part of their plans for decarbonisation, and only if the company demonstrates a credible strategic commitment to achieving net-zero by 2050”.
The university has maintained a working relationship with 13 fossil fuel companies since 2022.
The largest beneficiaries of fossil fuel financial commitments since 2022
Exeter
£14,700,000
Imperial College London
£6,725,769
Heriot-Watt
£6,005,844
Manchester
£3,077,268
Cambridge
£2,821,437
Oxford
£1,209,221
Royal Holloway
£740,657
Queen Mary London
£587,956
Teesside
£500,000
The University of Manchester houses the BP Centre for Advanced Materials (ICAM) research unit, a collaboration between BP and leading universities in the UK and US, including Manchester, Cambridge, and Imperial. The ICAM website states that the centre supports “BP’s ambitions to become a net zero company by 2050”.
BP generated just 0.17 percent of its energy from renewable sources in 2022 and, in the first half of last year, the company spent more than 10 times more on new oil and gas projects than it did on “low carbon” energy. In 2022, 92.7 percent of all activity for both BP and Shell went into fossil fuel investment.
As with Shell, BP posted record profits in 2022 worth some £23 billion. At the same time, it scaled back plans to cut emissions by 2050 on the grounds that it needs to keep investing in new oil and gas to meet consumer demand. BP did not respond to our request for comment.
The University of Manchester’s funding agreements with BP stretch back to 2008, when it was selected by the fossil fuel giant to run its Projects and Engineering College.
Hundreds of people have subsequently completed BP’s courses at the university, with Manchester describing the partnership as a “strategic alliance that has a major impact on both organisations”. The university has also received money from Shell and TotalEnergies.
A spokesperson for Manchester told DeSmog: “Since 2019 all new research funded in the BP ICAM has been focused on topics in materials sciences that support the energy transition, providing research to support BP’s goal to become a net zero company by 2050.”
Since 2022, Durham University’s research projects have included contributions and commitments from BP, ExxonMobil, and the China Petroleum and Chemical Corporation (Sinopec).
The university also previously partnered with the universities of Edinburgh and Leeds to form the Engineering and Physical Sciences Research Council’s Centre for Doctoral Training in Soft Matter and Functional Interfaces (SOFI CDT), which has been sponsored by industrial partners including Infineum, a joint venture between ExxonMobil and Shell.
Durham University is also a sponsor of the GeoNetZero CDT, a PhD research and training programme focused on geoscience and the energy transition, which has 11 other university partners; Heriot-Watt, Aberdeen, Birmingham, Dundee, Exeter’s ‘Camborne School of Mines’, Keele, Newcastle, Nottingham, Plymouth, Royal Holloway and Strathclyde.
From 2020 to 2022, CDT recruited 16 PhD students per year, funded in part by the oil and gas firm NEO Energy, which pledged £2.5 million alongside academic partners.
The centre is based out of the Shell Building at Heriot-Watt University’s School of Energy, Geoscience, Infrastructure and Society, and has nine core industry partners: BP, Cairn Energy, Chrysaor, China National Offshore Oil Corporation (CNOOC), Equinor, ExxonMobil, NEO Energy, Shell, and Total Energy.
A spokesperson for Heriot-Watt told DeSmog: “Heriot-Watt University and our Centres for Doctoral Training (CDTs) are committed to a rapid and just energy transition, led by our world-class research and teaching… The GeoNetZero CDT is a new programme of PhD research and training set up to address key areas in geoscience and their role in the low carbon energy transition and challenge of net zero.
“We work in collaboration with the energy sector to develop education and research opportunities related to net zero, responsible consumption of oil and gas, and the transition to renewable energy sources.”
Studentships
Fossil fuel companies pledged to fund scholarships and tuition fees across at least 17 universities in 2022.
The Italian multinational Eni funded a scholarship programme at the University of Oxford’s Saïd Business School in 2022 called the Africa Scholarship, as well as a scholarship programme with St Anthony’s College, Oxford.
Oxford has previously said that it “receives funding from and donations from companies and organisations from the fossil fuel sector” typically at an average of £3 million a year in research funding and £2 million in philanthropic donations. It says that the research funding is equivalent to less than 1 percent of the university’s research turnover.
Kellas Midstream also funds a set of scholarships at Teesside University, while Cardiff receives over £870,000 from TotalEnergies for its OneTech Futures graduate programme, which began in 2018 and runs through to 2025.
Shell has given the University of Aberdeen £150,000 for new “Transition Scholarships” for the coming academic year, funding research into “key challenges around net zero and reducing emissions”.
The university, based in Europe’s “oil capital” on the coastline of the UK’s North Sea oil and gas fields, pledged to divest from fossil fuels in 2021 – saying that it planned on excluding fossil fuel extraction companies from its £52.7 million investment portfolio by 2025.
A report commissioned by the University of Cambridge and led by Nigel Topping, a former UN climate action champion, last year recommended that the institution halt all funding from fossil fuel companies, including for research or philanthropic purposes. Cambridge itself took £2.8 million from Shell, BP, and BHP Billiton in 2022, and has reportedly received around £3.3 million per year from the industry since 2017.
A spokesperson told DeSmog: “The University of Cambridge only accepts funding from energy companies where it is sure that the resulting collaboration will help the UK and global society move to renewable or decarbonised energy. An enhanced set of criteria created in 2021 includes a written assessment from non-conflicted experts on whether the purpose of the proposed collaboration contributes meaningfully to the energy transition.”
A spokesperson for the University of Strathclyde said: “The University of Strathclyde is committed to supporting the energy transition to a sustainable, renewable energy system and the delivery of net zero targets by 2050. Much of the University’s work in the achievement of a sustainable and zero carbon economy is carried out in collaboration with industrial partners in the energy sector.”
A spokesperson for Royal Holloway, University of London, said: “At Royal Holloway, University of London, we are committed to developing and implementing activities that support environmental sustainability and a solution-based approach to net zero.”
The University of Bradford refused to reveal how much it received in partnerships with both Sinopec and the Saudi chemicals company SABIC, citing the commercial interests of the companies.
A deal struck between the University of Surrey and BP, running from 2019-2022, was also withheld because of a non-disclosure agreement in place.
A number of other universities refused our freedom of information requests or failed to respond to repeated requests for comment. This included the universities of East Anglia, Nottingham, Birmingham, Plymouth, Loughborough, Bishop Grosseteste, and Oxford Brookes.
Additional reporting by Joey Grostern and Sam Bright
UPDATE: 5 October 2023 – This article previously erroneously listed Scottish Power as a fossil fuel company. The firm has now been removed from the article and Strathclyde University removed from the largest recipients of fossil fuel funding.
Fossil fuel giants are largely left to submit their own extraction and emissions data, a freedom of information request shows.
The main regulator of North Sea oil and gas doesn’t conduct physical inspections to ensure companies operating in the region are following the rules, DeSmog can reveal.
The revelations, labelled “deeply troubling” by campaigners, come as the government and the regulator, the North Sea Transition Authority (NSTA), have announced plans to approve drilling at a new oil field, Rosebank, that could produce 69,000 barrels of oil and 44 million cubic feet of gas a day.
DeSmog filed a freedom of information request (FOI) to the NSTA asking the regulator how it ensured companies stayed within the oil and gas extraction maximums outlined in their licences. These rules govern, among other things, how much oil and gas companies are allowed to extract, and the amount of emissions they can produce in the process.
In its response, the NSTA told DeSmog that a company “must notify” the NSTA if a production limit is breached in the North Sea, but that the NSTA itself “does not undertake offshore inspections to ensure compliance with production consents”.
When asked how, given the lack of inspections, the regulator would ensure that companies are being accurate when they self-report the emissions being produced, the regulator said it hosted “an annual consents exercise” (seemingly a single meeting) during which they remind operators of “their obligations and how to ensure they remain in regulatory compliance”.
The findings suggest that operators in the North Sea are left to largely self-regulate – declaring themselves when they break the legal rules governing their operations.
According to Violation Tracker UK, the NSTA has issued just two fines worth £100,000 since 2021 related to companies exceeding the oil and gas extraction limits in their licence.
“This FOI reveals deeply troubling findings about the lack of proper regulation of North Sea oil and gas extraction,” said Matthew Lawrence, the director of the Common Wealth think tank.
Daniel Jones, a researcher at the campaign and research group Uplift, added that “The NSTA has never acted like a regulator in the normal sense, preferring to steer and encourage the industry into behaving responsibly, rather than mandating that companies reduce their environmental impact.
“It’s only very recently, in 2021, that the NSTA introduced any mechanisms at all to tackle the huge emissions from producing oil and gas, which account for 4 percent of all UK emissions, and even these require companies to do very little”.
‘Light Touch Regulation’
The NSTA, formerly the Oil and Gas Authority, is a private company wholly owned by the government, which primarily seeks to “maximise” the economic output of North Sea oil and gas, and aid the transition to net zero.
This month, the company awarded the UK’s first ever licences for carbon capture and storage (CCS), which it said “could store up to 30 million tonnes of CO2 per year”. However, the role of CCS in the energy transition is hotly contested.
Climate scientists point to the failure of CCS to remove significant amounts of CO2 emissions, while campaigners warn of the high costs compared to renewable energy. The vast majority of companies also use the captured CO2 to extract more oil through a process called “enhanced oil recovery”.
Stuart Haszeldine, professor of carbon capture and storage at the University of Edinburgh, has compared commissioning CCS sites as well as new oil fields to ordering a truckload of cigarettes for someone giving up smoking.
DeSmog’s new findings also raise concerns about the monitoring of illegal flaring – the burning of excess natural gas produced during the oil and gas drilling process, which produces hundreds of millions of tonnes of CO2 emissions a year.
According to Violation Tracker UK, the NSTA has issued two fines for flaring since 2021, worth a total of £215,000.
In 2022, £65,000 fine was imposed on Equinor, the firm that owns much of the new Rosebank oilfield. Two years prior, Equinor had flared at least 348 tonnes of CO2 over and above the amount it was permitted to burn. Even that failure was considered an “administrative breach” by the NSTA. In the first six months of 2023, the Norwegian-owned energy company posted profits of £17.1 billion.
The UK’s operations in the North Sea produce almost three times the direct greenhouse gases per barrel of oil than our neighbour Norway, largely due to a significantly higher use of flaring on UK-regulated oil rigs. In 2022, UK North Sea operations burned 22 billion cubic feet of gas in offshore flaring.
DeSmog’s findings come just days after the NSTA announced it was approving plans for the Rosebank oilfield, with a government minister claiming the move would lead to “lower emissions” in the UK.
The field has the potential to produce 500 million barrels of oil in its lifetime, which when burned would emit as much carbon dioxide as running 56 coal-fired power stations for a year.
Campaigners including Greta Thunberg have expressed their anger at the proposals, with Green Party MP Caroline Lucas describing the project as “the greatest act of environmental vandalism in my lifetime”.
The government has also said it will imminently issue hundreds of new licences for oil and gas exploration in the North Sea, while Prime Minister Rishi Sunak has announced the watering down of several key net zero targets.
The International Energy Agency warned in May 2021 new fossil fuel developments were incompatible with the effort to limit global temperature increases to 1.5C above pre-industrial levels.
There are currently 283 active oil and gas fields in the North Sea, and the production process alone generated 13.1 million tonnes of direct CO2 emissions in 2019.
Matthew Lawrence of Common Wealth added that, “Decades of light touch regulation and privatisation have led to an energy system – from North Sea extraction to the super profits being made in energy generation and distribution – geared toward profit maximisation at the expense of people and planet.
“In this context, the government’s decision to approve the Rosebank oilfield and issue 100 new licences for fossil fuel extraction pose an even more grave risk to the climate.
“The alternative is a clean energy system based around meeting public and environmental needs”.
A spokesperson for NSTA did not address any of the findings in the freedom of information request, but stressed that the majority of flares “are fitted with metres” and the group is working to “increase the use of direct measurements”.
They added that government departments receive “actual emission data” on North Sea oil operations and that the NSTA was “working with [the Offshore Petroleum Regulator for Environment and Decommissioning] to improve the visibility of this data and help industry increase the accuracy of emissions measurement”.
In a four-line statement announcing the approval of the new Rosebank oil field 80 miles west of Shetland, the UK’s offshore oil and gas regulator showed its mission no longer serves the public good.
The announcement by the North Sea Transition Authority (NSTA), which regulates oil and gas extraction in the waters off the British coast, asserted that net zero considerations had been taken into account – a technical definition that makes it appear long-term oil production is compatible with climate goals. This has outraged and dismayed climate scientists, campaigners, and the many other people concerned about the UK’s faltering climate leadership.
The approval greenlights a process that is expected to produce first oil by 2026, and around 300 million barrels of oil (and a smaller amount of gas) over the next two decades. The project’s developers are Equinor, an oil company owned for the most part by the Norwegian state, and Ithaca Energy, owned by the Delek Group listed on the Tel Aviv stock exchange.
The decision is out of step with demands for rapid action on climate change coming from a range of quarters. This includes shareholder activists demanding corporations accelerate decarbonisation, direct action groups such as Just Stop Oil, and financiers concerned about the risks of “asset stranding” as renewables become cheaper than fossil fuels.
Public protests and legal challenges to the NSTA spotlight the irrationality and recklessness in the government’s expressed support for issuing new licenses. Activists are not alone in making this point.
A welter of scientific studies and reports by international agencies confirm that new fossil fuel extraction is incompatible with keeping global temperature increases well below 2℃.
Rosebank has been a major focus for climate activism in the past couple of years, as science, international policy and campaigners turn their attention to stopping new extraction, rather than solely focusing on reducing emissions. Calls to end new licensing for oil and gas are in line with climate science.
But a climate politics focused on new licensing alone misses the point. The thing is, like other North Sea oil fields yet to be approved, Rosebank was licensed for oil and gas extraction years ago.
The NSTA approval process follows licensing, sometimes after considerable time has passed. And it is this approval process that locks the UK into hydrocarbon production for years to come.
End ‘maximising economic recovery’
The core objective of the NSTA is to maximise the economic recovery of UK petroleum – a principle shorthanded as MER – as set out in the 1998 Petroleum Act. In practice, this means the regulator’s primary mission is to facilitate the extraction of oil and gas.
A revised strategy in 2021 paired MER with an obligation to support the UK’s net zero commitments. And the former Oil and Gas Authority changed its name to include an explicit reference to the “transition” in 2022, underpinned by ambitions for emissions reduction and decarbonisation.
NSTA sees its job as effecting the industry’s alignment with these goals. It is now also in charge of licensing for carbon capture and storage and offshore hydrogen storage.
Rosebank’s approval therefore reveals a deeper truth: the regulator’s guiding objective fails the public good test. Regulation aims to avoid economic, environmental and social harms, and ensure the public good through delivering collective benefits and upholding socially-desirable ideals. The Rosebank decision arguably breaches this principle.
Supporters of Rosebank argue it will contribute to the UK’s energy security and deploy decarbonisation technologies that reduce CO₂ emissions overall. These arguments do not stand scrutiny, however: oil from Rosebank, like around 80% of North Sea oil production, will be sold directly into international markets and will not materially affect the price of petrol or diesel for UK motorists.
Much of the value of that oil will flow into the portfolios of Equinor and Ithaca. That value could be harnessed to speed up transition to renewables or ensure its benefits are widely distributed, but that’s largely down to Equinor and Ithaca – not the UK government.
A decade ago, a decision by NSTA would not have raised much attention. Now it highlights a significant problem in need of reform. Piecemeal adaptation has left MER and other core regulatory principles untouched, which is at odds with the climate emergency.
Existing licensed fields escape the weak scrutiny embodied in instruments such as the climate compatibility checkpoint, a series of tests to be applied in decisions about future licensing rounds. What’s more, as a litmus test for approval, Rosebank indicates other licensed projects may get the go-ahead, like Cambo.
Removing NSTA’s central objective to maximise economic recovery requires nothing less than a rewrite of the Petroleum Act. This would be an opportunity to fundamentally revise what the North Sea is for, and whether or how to exploit its resources in the future. A start would be to consider a reversal of direction – a “minimising” of economic recovery, for example – which redefines the “economic” in terms of what is socially necessary.
Such a move will inevitably entail reviewing licences already in place, and will likely generate challenges from the sector and other powerful incumbents. Rosebank exposes, however, how the new mission of the offshore regulator has to be about securing a new public good. This needs wider social debate, and should ultimately be decided through parliament.
Don’t have time to read about climate change as much as you’d like?
Campaigners take part in a Stop Rosebank emergency protest outside the U.K. Government building in Edinburgh, after the controversial Equinor Rosebank North Sea oil field was given the go-ahead Wednesday, September 27, 2023. (Photo: Jane Barlow/PA Images via Getty Images)
“The disgraceful decision to give Rosebank the green light shows the extent of the U.K. government’s climate denial,” one activist said.
Regulators in the United Kingdom on Wednesday greenlit the Rosebank oilfield in the North Sea, which campaigners warn contains enough oil and gas to match the yearly emissions of 28 low-income countries.
The U.K. government said it welcomed the approval, in a statement that comes one week after Prime Minister Rishi Sunak announced he was delaying some elements of the country’s net-zero plan.
“By approving Rosebank, Rishi Sunak has confirmed he couldn’t care less about climate change,” climate lawyer and executive director of the advocacy group Uplift Tessa Khan said in a statement. “As we’ve heard repeatedly, our world can no longer sustain new oil and gas drilling. And when we’re witnessing scorching temperatures, wildfires, devastating flooding, and heatwaves in our seas, it could not be clearer that this is a decision by the prime minister to add more fuel to the fire.”
🚨 BREAKING: The UK government has just approved Rosebank, the biggest undeveloped oil field in the UK. We won’t let this stand.
Rosebank, which is located off the northwest coast of the Shetland Islands, is the largest currently undeveloped oil field in the U.K., CNBCreported. Equinor, Norway’s state-owned oil company, has an 80% share in the project, with British company Ithaca Energy holding the remaining 20%.
Equinor said it expected development to begin in 2026-2027 and for the field to produce more than 300 million barrels of oil overall, while Friends of the Earth Scotland said it contained 500 million barrels.
The approval comes despite the fact that the International Energy Agency concluded in 2021 that no new fossil fuel projects should be launched if world leaders wanted to limit global heating to 1.5°C. It also comes on the heels of a government report finding that a record number of people in England died of heat-related causes in 2022.
“This decision is nothing but carte blanche to fossil fuel companies to ruin the climate, punish bill payers, and siphon off obscene profits.”
Green Member of Parliament Caroline Lucas called the approval “the greatest act of environmental vandalism in my lifetime” in a statement posted on X, formerly known as Twitter.
“This is morally obscene,” she added in a second post. “It won’t improve energy security or lower bills—but it will shatter our climate commitments and demolish global leadership. Govt is complicit in this climate crime—as is Labour unless they pledge to do all possible to revoke it.”
Sunak, a conservative, promised to approve hundreds of oil and gas drilling licenses in the North Sea in July, arguing it was necessary for energy security. The opposition Labour Party says it will prioritize renewable energy if it takes power, but will respect any licenses or approvals already in place, according to Reuters.
“The disgraceful decision to give Rosebank the green light shows the extent of the U.K. government’s climate denial,” Friends of the Earth Scotland’s oil and gas campaigner Freya Aitchison said in a statement. “Fossil fuels are driving both climate breakdown and the cost of living crisis yet the U.K. Government is slamming its foot down on the accelerator.”
Aitchison also called on the Scottish government specifically to oppose the project.
“Delivering a fair and fast transition away from fossil fuels is one of the defining challenges of Humza Yousaf’s term as First Minister,” Aitchison said. “This must start with unequivocally condemning Rosebank and opposing the U.K. government’s decision to go ahead with a project that deliberately prioritizes the interests of Equinor while bringing little or no benefit to Scottish people.”
Campaigners also questioned who would benefit from the project. While the government argued that it would inject cash into the economy and create almost 1,600 jobs, activists pointed out that Equinor made £62 billion in pre-tax profits last year and would get more than £3.75 billion in tax breaks for its work on Rosebank, meaning the U.K. would ultimately lose £750 million in tax money from the field’s development.
“The ugly truth is that Sunak is pandering to vested interests, demonstrating the stranglehold the fossil fuel lobby has on government decision-making. And it’s bill payers and the climate that will suffer because of it,” Greenpeace U.K. climate campaigner Philip Evans said in a statement. “Why else would he make such a reckless decision?
“This decision is nothing but carte blanche to fossil fuel companies to ruin the climate, punish bill payers, and siphon off obscene profits,” Evans added.
Opponents of the project have promised to take legal action to stop it.
“There are strong grounds to believe that the way this government has come to this decision is unlawful,” Khan said in a statement. “We shouldn’t have to fight this government for cheap, clean energy, and a liveable climate, but we will.”
