Jackdaw gas field approval cannot be distraction from wider crisis facing Aberdeen and the North Sea
The Jackdaw approval will be seen as the first step in a reset of relationship between the North Sea industry and the UK Labour government.
Speculation the UK government could give the green light to new North Sea oil and gas projects has been rife for months if not years. But in recent weeks, it has become clear that the Jackdaw gas field was almost-certainly going to be approved.
Jackdaw was the first out of the two bellwether projects to be announced because it was further forward in the process. But in reality, Jackdaw is also the easiest to sell the benefits to.
There have been some reports that UK gas supplies could run low this winter. Despite the fact that the Jackdaw project will only meet around 2 per cent of UK demand, up to 6 per cent at its peak, the optics of boosting supplies with domestic fuels is a no-brainer. The same cannot be said for the Rosebank oil field, with the vast majority of the fuels set to be exported to be burned overseas.
Politicians, however, should be honest about what the Jackdaw project alone does. Factually, it will not do anything to bring down energy bills and will have a negligible impact on energy security. But it will boost the economy in the North East. The protection of hundreds of jobs alongside the creation of 27 full time positions has been prioritised by the UK government.
The Chancellor’s £2 billion energy wealth fund - using North Sea oil and gas tax revenues to invest in renewables sounds good - but given the failures to invest at Grangemouth, we will have to wait and see what it delivers.
READ MORE: North Sea chief demands action from Andy Burnham to open 'bigger pipeline' of oil and gas projects
Despite the very legitimate climate concerns around opening up the North Sea basin to more extraction, Scotland’s two governments should be blunt with the public that the economic benefits are being given precedence rather than the iffy claims that consumers will win from this decision. There is nothing to suggest that they will.
For the industry, approving the Jackdaw development is seen as the first step in opening up the North Sea to new fossil fuels extraction as well as a much-needed “reset” of the relationship with the UK government.
But it was a key test of Labour’s manifesto commitment to ban new oil and gas licences being issued. We now know, beyond doubt, that developments reapplying for environmental consent following landmark court cases, are not bound by the vow to end new permits.
It is not just Jackdaw and Rosebank. The Scotsman revealed last week that five other projects including the Cambo oil fields have also resubmitted environmental consent applications. More than 100 projects could eventually get the go-ahead. It could give the North Sea basin a final economic flourish before reserves do finally run dry and the climate crisis is given the attention it truly deserves.
Much to the horror of climate campaigners, we also now know that fossil fuel giants are able to justify their proposals on environmental grounds, even though those flagship court cases set the precedent that the impact of the oil and gas contained within projects must now be taken into account.
The North Sea oil and gas sector has repeatedly warned that the industry is facing a fatal crisis - but it is on borrowed time. What Scotland’s two governments and the industry cannot now do is allow Jackdaw and potentially other projects that follow next becoming a distraction to a real joined-up strategy on how to handle the dwindling resources and ensure jobs are not shed as renewables scale up. That would be an unmitigated disaster for Aberdeen and the North East.
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