SNP warned of 'catastrophic consequences' for Scottish economy if Rosebank oil plans shelved
Concerns have been raised about the financial impact of two key North Sea oil and gas developments not proceeding.
Scotland’s acting net zero secretary has been warned that two controversial North Sea fossil fuel developments being blocked could have "catastrophic consequences" for the Scottish economy.
Equinor and Ithica, behind the Rosebank oil project, and Shell, bringing forward the Jackdaw gas field proposals, have been forced to reapply for environmental consent following court action that stated developers must take into account the emissions produced from burning the oil and gas contained in the sites.
The UK government is poised to publish updated environmental guidelines ahead of the reapplications for environmental consent.
Sir Keir Starmer’s government has pledged to ban new North Sea oil and gas licences but it is possible Rosebank and Jackdaw could be classed as existing licences, which Labour has committed to keep intact.
Read more: Rosebank approval 'poised to open floodgates' to 13 oil projects despite Labour's drilling vow
But an outspoken SNP backbencher has claimed that the Scottish economy could be in line to lose hundreds of millions of pounds if the developments do not proceed.
Fergus Ewing, who has a track-record of speaking out in favour of fossil fuels, told MSPs that there was a risk “Scottish funding may reduce by several hundred million pounds if Rosebank and Jackdaw are not consented”.
He added: “The reasons are very simple. Those companies have invested around £2bn because they've obtained the consents necessary, they’ve complied with all the regulations and now they find that the process has been changed mid-case.”
Mr Ewing added: “The goalposts may be moved. If that happens, there will be a fiduciary duty on the directors of all the companies to recover their losses, which will amount to the money they paid out - £2bn - plus loss of profits.
Read more: 'Turning point': Rosebank oil and Jackdaw gas permissions in North Sea scrapped by courts
“If that happens, isn’t the Scottish Government worried that it is inevitable, whether through Barnetisation or otherwise, that the Scottish taxpayer will pay a heavy price. Should we not, therefore, support Rosebank and Jackdaw to avoid those catastrophic consequences?”
SNP acting net zero secretary, Gillian Martin, pointed to her government’s “support for a just transition for Scotland’s oil and gas sector”.
Ms Martin suggested her government’s long-delayed energy strategy has been further held up by the court action, despite telling The Scotsman in November it would be agreed by John Swinney’s Cabinet by the end of 2024. The current energy strategy dates back to 2017.
Ms Martin said: “We continue to call on the UK government to approach decisions on offshore oil and gas in a rigorously evidence-led case-by-case basis based on climate compatibility that is robust and domestic energy security as key considerations.”
At First Minister’s Questions on Thursday, Mr Swinney was accused of turning his back on the North Sea oil and gas sector.
Meanwhile Mr Swinney accused Scottish Conservative leader Russell Findlay of “barefaced dishonesty” over his party’s U-turn on net zero.
Mr Findlay highlighted the closure of the Grangemouth oil refinery and accused the Scottish Government of attempting to “shut down all oil and gas production” when in power with the Scottish Greens.
The Scottish Conservative leader stressed Scotland “will now need to import all of our petrol, diesel and other fuels”.
He said: “This is the price of the SNP’s and Labour’s hostility towards oil and gas.
READ MORE: Targeted campaign to sell Grangemouth's future to the world as dozens of investors line up
“Before more damage is done, will John Swinney drop his Government’s presumption against new oil and gas exploration?”
The Scottish Government has delayed the publication of its new energy strategy by two years, with a draft version touting a potential policy of a presumption against new drilling.
Mr Findlay accused the First Minister of bringing “dangerous cranks”, the Scottish Greens, into government, who he claimed want to “shut down all oil and gas production”.
Pointing to the closure at Grangemouth, Mr Findlay said: “The greatest blame lies with the government that turned its back on Scotland’s world-leading and innovative oil and gas industry.”
But Mr Swinney insisted the economy must adapt to the “reality” of the climate crisis.
The Scotsman previously revealed Mr Findlay now opposes the Scottish Government’s net zero target, warning it risks “economic sabotage”.
Mr Swinney said: “I know the Conservatives are involved in a pivot on net zero and they in fact want to deny the climate challenges that we face.”
The First Minister reiterated that any oil and gas licensing decision “must be the subject of a climate compatibility assessment” - a policy pushed by former Conservative prime minister Boris Johnson.
He said the Scottish Government will “support industry to transition to that reality” of transition required in the climate crisis.
But Mr Findlay insisted “we are being honest with the public about the costs of net zero”. Pointing to Mr Swinney, he added: “They are not.”
The Scottish Tory leader added: “Instead of learning lessons from the SNP’s harmful approach to oil and gas, the Labour government is copying it. Labour’s copycat approach will cost more Scottish jobs, it will increase bills and it will do more to harm the environment by importing energy from overseas.”
Mr Swinney pointed to the Scottish Tory leader voting in November to support Scotland’s 2045 net zero target remaining intact and then highlighted Mr Findlay’s comments to The Scotsman that it was a “refreshing outbreak of honesty” for his UK leader Kemi Badenoch to call for net zero targets to be scrapped.
The First Minister added: “I call it barefaced dishonesty in front of the people of this country.”
Mr Swinney accused the Tories of being happy “to vote for climate change targets one minute and press this Government to act on those climate change targets and then desert the field when the going gets tough”.
In response, Mr Findlay accused the First Minister of having “built a career” on “barefaced dishonesty”.
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