Rosebank and other North Sea oil and gas fields could be given green light under new guidelines

UK ministers could sweep aside climate concerns to approve controversial oil and gas projects if the economic benefits are seen to outweigh the damage, under new guidance.

The Labour government published the new guides for oil and gas developers who have received a licence for North Sea projects but still require environmental consent.

It will apply to the developers of the Rosebank oil field, Equinor and Ithaca, and Shell for its Jackdaw gas proposals.

A small number of other projects could also come forward that already have a licence but need environmental consent, it is believed.

Campaigners said approval for these projects in light of the new guidance would be "indefensible" and a “political sleight of hand”.

Rosebank and Jackdaw developers will need to reapply for environmental consent including the pollution from burning the oil and gas extracted from the projects

It was drawn up after a Supreme Court ruling found the emissions caused from burning the oil and gas contained in a project, called Scope 3 emissions, needed to be taken into account in applications for environmental consent.

Amid the stricter guidance for oil and gas giants is an ability for UK Energy Secretary Ed Miliband to weigh up the environmental harm against the economic benefits of allowing the project to proceed.

Mr Miliband has previously branded the licence handed to the Rosebank project as “climate vandalism”.

READ MORE: Treasury 'poised to miss out on £250m in tax receipts from Rosebank oil development'

Labour has previously ruled out issuing new oil and gas licences for the North Sea, but Prime Minister Sir Keir Starmer has said the fuels will be needed for decades to come and indicated he would not “interfere” with existing licences.

The International Energy Agency has previously said no new fossil fuel projects should be developed beyond existing fields if the world is to stay below 1.5C of global warming.

Energy minister Michael Shanks said: “This new guidance offers clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling.

Energy Minister Michael Shanks | Contributed

“It marks a step forward in ensuring the full implications of oil and gas extraction are considered for potential projects and that we ensure a managed, prosperous, and orderly transition to the North Sea’s clean energy future, in line with the science.

“We are working with industry, trade unions, local communities and environmental groups to ensure the North Sea and its workers are at the heart of Britain’s clean energy future for decades to come – supporting well-paid, skilled jobs, driving growth and boosting our energy security.”

The guidance states that the “significance of environmental effects will always be considered…on a case-by-case basis”.

READ MORE: Acorn carbon capture: The £18bn project that could protect 35000 jobs remains a pipedream

The advice to fossil fuel giants states that “when reaching a decision as to whether agreement should be given to the grant of consent”, Mr Miliband “will consider the environmental effects of the project and will form a view of the overall balance of advantage between any potential significant effects on the environment and wider benefits to the interests of the nation and any other relevant factors in proceeding with the project”.

A map showing the location of the Rosebank and Jackdaw oil fields | Kimberley Mogg/NationalWorld

It adds: “In reaching this view the Secretary of State will usually consider, amongst other matters, the severity, extent, understanding and duration of the significant effects, the Government's overall energy and environmental objectives, and the potential economic and other advantages of the project proceeding.

“This includes an assessment of the extent to which the project aligns with the Government’s stated objectives for the future of the North Sea.”

READ MORE: Labour minister warns North Sea to 'plan for future' without oil and gas

Friends of the Earth Scotland’s head of campaigns, Caroline Rance, said “it would be indefensible for ministers to know the climate harm and yet approve new oil fields”.

The organisation’s oil and gas campaigns manager, Rosie Hampton, added: “It would be morally, financially and environmentally dishonest for a minister to try and force through new oil by focusing on narrow economic concerns.”

Tessa Khan, executive director of Uplift, said: “The new rules mean that oil and gas companies will finally be forced to come clean over the enormous harm they are causing to the climate.”

Uplift's executive director Tessa Khan

She claimed Rosebank would not lower fuel bills or boost energy independence as most of the oil would be exported.

Greenpeace UK head of climate Mel Evans said approving the projects would be a “political sleight of hand” that would benefit oil giants while leaving the UK hooked on fossil fuels.

READ MORE: Rosebank approval 'poised to open floodgates' to 13 oil projects despite Labour's drilling vow

Chief executive of Offshore Energies UK (OEUK), David Whitehouse, said the new guidance was “an important next step”.

He added: “The publication of this guidance enables firms to move ahead with the process to responsibly develop projects that add jobs and value to the UK economy and boost energy security.

“The UK’s offshore energy industry takes its environmental responsibilities seriously and has reduced emissions from oil and gas production by 28 per cent since 2018. The North Sea is held up as one of the most robustly regulated sectors in the world and our approach is recognised internationally as an example of good practice.

“Energy security is national security. In an increasingly volatile world, the widening gap between the energy we produce and what we import matters.

“Oil and gas produced in the UK must remain the provider of choice over imports which are often associated with higher emissions, fall outside of our regulatory control, contribute no UK taxes and support no UK jobs.”

Scottish Greens co-leader Patrick Harvie said: “The new guidance issued today does not give clarity that the UK Government will actually start putting the climate first. But it does at least mean that the fossil fuel profiteers will no longer be able to hide the scale of damage that new oil and gas drilling will cause to our climate.

“It’s been obvious for years that promising a future based on fossil fuels is a dangerous fantasy. Real energy security, cheaper bills and better jobs can all be achieved by investing in home-grown, green renewables.

“But the test now will be whether Labour Ministers face up to scientific reality.”

The new guidance comes as an analysis, seen by The Scotsman, revealed that the UK government is poised to miss out on more than £250 million from tax revenue over the Rosebank plans - putting the economic benefits of the project in doubt.

The WWF Norway analysis found tax breaks for UK North Sea oil and gas developers tied with the proposed end to the contentious energy profits levy means the Treasury is set to issue more relief and breaks than is due in tax receipts over the Rosebank oil proposals - with a potential deficit of £258m.