Rosebank is the price of decades of energy failures
The approval to drill one of the largest oil and gas fields in British waters for decades smacks of Sunak pressing the panic button
‘It will make little difference to energy security because much will be exported’
The Rosebank oilfield is located around 80 miles north-west of the Shetland islands, 3,600ft below the surface of the North Sea. And it is into this black abyss that any semblance of a coherent plan to power Britain has slipped after its owners were granted permission to drill for new oil and gas.
The timing of the announcement alone was comically bad. Just 24 hours after the International Energy Agency had warned that any new oil and gas infrastructure was incompatible with the Paris Climate Agreements of limiting global warming to 1.5C – an accord of which the UK is a signatory – the North Sea Transition Authority has given the green light to a development that is expected to produce as much as 500m barrels of oil over its lifetime.
A cross-party group of MPS and peers estimate that is equivalent to 200m tons of carbon dioxide – “more than the combined annual CO2 emissions of all 28 low-income countries in the world.”
The truth of Rosebank is that it does none of the things that ministers and its cheerleaders claim. Instead, it underlines how desperately muddled our energy policy has become. It is the price we must pay for decades of failure to invest in and plan for an energy system capable of replacing one dominated by fossil fuels.
The malaise stretches back decades but this Government has taken incompetence and confusion to new heights. Ed Miliband was characteristically OTT when he claimed the Government “broke the onshore wind market, undermined the solar industry and caused chaos with botched home insulation”, but not by much. Grant Shapps’s final contribution in his brief stint as energy secretary was a shambolic offshore wind licensing round that resulted in a grand total of no bids for the seven new contracts that were on offer.
The Prime Minister has also sowed confusion among carmakers who thought they were to sell only electric cars by 2030. Nissan, Britain’s biggest carmaker, plans to effectively ignore his decision to push the end of petrol and diesel engines out to 2035.
At a time when ministers have been throwing hundreds of millions of pounds of taxpayers’ money at battery plants, factory upgrades to support electrification, and charging infrastructure, it is impossible to fathom No10’s strategy.
This type of incoherence is nothing new in energy, alas. Successive governments have practically stood and watched as our entire nuclear power fleet staggers towards the end of its life, leaving a giant hole in the UK’S electricity supply. Once again, it is our over-reliance on the kindness of strangers that leaves the country facing a massive crisis.
France’s state-backed EDF operates all of Britain’s eight nuclear power plants. Five of those still provide power to the grid – equivalent to 13pc of the electricity we consume – but every one of the plants still in operation is due to close by 2028 apart from Sizewell B, which is scheduled for shut down in 2035.
The only plant under construction is Hinkley C, which will be the first in three decades but it is already £14bn over budget and there are fears it could be delayed until 2036 – 11 years later than promised.
Amid this void, is it any wonder that the Prime Minister has pressed the panic button and granted approval for one of the largest oil and gas projects in British waters for decades?
There’s some merit in the idea that approval for Rosebank is justified on the basis that it preserves the foundations of a domestic oil and gas industry that is likely to be needed in the transition to a fully renewable energy system, and still makes a significant contribution to the economy. Block the scheme and might it spark a full-blown exodus from a sector that claims to support 200,000 jobs and generate £50bn of tax revenues, taking vital skills and know-how with it? Possibly, though similarly doom-laden forecasts were made about the windfall tax and to the surprise of absolutely nobody, Rosebank’s owners Equinor and Ithaca Energy have gone nowhere. But the fear of big players walking away from the North Sea is real.
Nevertheless, most of the arguments for allowing new drilling to take place are slippery. Rosebank will make little difference to energy security because much of its products will be exported abroad. The same claims were made when Shapps promised to “max out” the North Sea’s remaining oil and gas reserves but what he conveniently neglected to mention is that about 80pc of the oil produced in the region is shipped overseas.
Nor will Rosebank have any impact on energy bills because the oil and gas that comes from it will be sold on the international markets at corresponding prices.
Once again, it appears that ministers are trying to gaslight voters on an issue of national importance. But no amount of spin can disguise the flawed thinking behind this decision.