The UK Energy Secretary concluded that approving the fossil fuel development would not derail the UK’s net zero target.
The UK government has confirmed the controversial Jackdaw gas field project has been approved - despite Labour vowing to ban new fossil fuel drilling in the North Sea.
The development, located around 150 miles off the cost of Aberdeen, is expected to start to supply gas to UK homes and businesses from the end of this month, after the UK Energy Secretary agreed that the regulator can grant consent for gas to be produced at the field.
The Jackdaw decision is expected to increase domestic gas production by around 6 per cent at its peak – supporting the UK’s gas supply over its lifespan of up to 11 years, protecting hundreds of jobs and adding an estimated £2.9 billion to the UK economy. But according to developers, the project will only create an extra 27 full time jobs.
A decision is still to be taken on whether to approve the bigger Rosebank oil project, alongside a pipeline of other North Sea developments.
Chancellor John Healey has also announced today the establishment of a new energy wealth fund, which will use tax revenues from North Sea oil and gas to invest in renewable and low carbon energy projects and support the green transition. This will start with an initial £2 billion injection of funding, with future revenues from the North Sea flowing into the fund over time.
READ MORE: North Sea chief demands action from Andy Burnham to open 'bigger pipeline' of oil and gas projects
The Energy Secretary, Miatta Fahnbulleh, has concluded that the Jackdaw project will not prevent the UK from being able to meet its legally binding limits on carbon emissions and achieve net-zero by 2050.
The Jackdaw gas field is already licensed and the North Sea Transition Authority’s decision to grant consent now gives the developer the green light to begin operations at the field.
It follows the Supreme Court’s ruling on the Finch case in 2024, which means North Sea operators are now required to consider the impact of burning the extracted oil and gas in environmental impact assessments.
READ MORE: The five North Sea oil and gas projects waiting in pipeline if Rosebank and Jackdaw given green light
Ms Fahnbulleh said: “Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers.
“This decision will support the country’s energy security with homegrown gas this winter and help minimise the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear.
“The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050.”
Prime Minister Andy Burnham said: “I welcome the Energy Secretary’s decision, which will protect hundreds of jobs and help keep millions of homes warm this winter.
At a time when people are really struggling, it's right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help.”
He added: “We’re committed to moving towards renewable energy and reaching net zero by 2050. But even on our ambitious climate path, we’ll still require oil and gas as part of our energy needs for decades to come.
That’s why we’re taking a pragmatic approach to the North Sea. We’re also establishing a new Energy Wealth Fund to invest in renewable energy, support the green transition and help reduce energy bills over the long-term.“Our approach will ensure we can boost our energy security, back British workers, ringfence future North Sea proceeds to speed up the green transition, hit our ambitious climate targets and - crucially - bring down bills.”
Scottish energy minister, Stephen Gethin, criticised the length of time taken over the decision and called for all future oi land gas revenue to be placed in a futures fund.
He said: “The decision to consent the Jackdaw gas field has obviously taken longer than anticipated given previous UK government decisions being challenged in the courts.
“We hope this will provide some stability and certainty after many years of difficulty in the sector thanks to UK government policy.
"We have been clear that utilising domestic oil and gas resources is preferable to international sources, where importation leads to a bigger carbon footprint. We would expect that this, alongside wider climate compatibility assessment, has been the basis of the UK government's decision and look forward to seeing the detail of this.”
Mr Gethins added: "It is crucial that all further income from oil and gas resources taken by the UK Treasury is placed in a future generations fund. That would deliver a long term benefit from a limited resource. Any such fund should grow Scotland's renewables industry, support the communities who have generated hundreds of billions of pounds in taxation for Westminster, and strengthen the supply chain to ensure ongoing investment and job creation in Scotland.
"I am sure that the Prime Minister will agree that it is absolutely critical that if any new production goes ahead, then the economic benefits should be felt in Scotland and should be used to bring energy bills down, rather than flowing to plug more short term spending gaps by the Treasury.”
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But Greenpeace, one of two campaign groups that took the UK government to court over new developments, has hit out at the decision.
Ami McCarthy, head of politics for Greenpeace UK, said: “Approving Jackdaw shows the toxic grip fossil fuel lobbyists still hold over our energy policy. Andy Burnham promised pragmatism, but there is nothing pragmatic about rubber-stamping a project that won't lower energy bills, won't boost energy security and will create just 27 full-time jobs.
“What Jackdaw is guaranteed to do is generate record profits for Shell and Equinor while supercharging the climate chaos hitting families here and abroad. Going on to approve Rosebank would detonate an even bigger carbon bomb, releasing as much carbon as 56 coal plants operating for a year.
“True pragmatism means severing our reliance on expensive oil and gas that leaves British households broke, supercharges extreme weather, and leaves our energy security at the mercy of petrostates.”
Friends of the Earth Scotland’s head of campaigns, Caroline Rance, said: “The UK government has chosen to put hundreds of thousands more people at risk from fuel poverty and extreme weather by approving new gas drilling.
“The Jackdaw field will bring just 27 jobs and is a distraction from planning a fair and fast transition for workers that recognises the reality that the oil and gas in the North Sea is rapidly running out.
“The longer we rely on gas for electricity and heating, the longer we will be trapped into the cycle of sky-high energy bills and fuel poverty.
“Oil companies have spent their record profits on a sustained campaign of political and media lobbying to pressure the government into ignoring the evidence of climate breakdown. It is a disgrace that politicians would put the profits of oil company shareholders and bosses above the safety of everyone else.”