UK Plans New Environmental Guidance for North Sea Oil and Gas Firms

By Charles Kennedy - Aug 29, 2024

The UK government plans to introduce new environmental guidance for oil and gas companies operating in the North Sea, following the landmark ruling of the Supreme Court which requires regulators to consider the Scope 3 emissions of future projects when approving them.

The UK Supreme Court ruled in June that a local council unlawfully granted approval to an onshore oil drilling project as planners must have considered the emissions from the oil’s future use as fuels, in a landmark case that could upset new UK oil and gas project plans.

The judges wrote in the judgment that “It is an agreed fact that, if the project goes ahead, it is not merely likely but inevitable that the oil produced from the well site will be refined and, as an end product, will eventually undergo combustion, and that that combustion will produce greenhouse gas emissions.”

In light of this ruling, the Labour government announced on Thursday it plans new environmental guidance for oil and gas companies, which, the cabinet says, would help “provide stability for industry, support investment, protect jobs, deliver economic growth, and meet its climate obligations, as the North Sea transitions to its clean energy future.”

Minister for Energy Michael Shanks said,

“We will consult at pace on new guidance that takes into account the Supreme Court’s ruling on Environmental Impact Assessments, to enable the industry to plan, secure jobs, and invest in our economy.”

While planning new environmental guidance to provide certainty to industry, the government also said in the same communication that it would not challenge the judicial reviews brought against development consent for the Jackdaw and Rosebank oil and gas fields in the North Sea, throwing more uncertainty on these already consented projects.

Climate groups Greenpeace and Uplift have sued to seek judicial reviews to stop the development of Rosebank and Jackdaw.

Earlier this week, Equinor, the operator of Rosebank, said it awaits clarity on the UK tax regime by the Labour government before strategizing and committing to investments in the UK North Sea.

By Charles Kennedy for Oilprice.com