Oil Field Developer Warns of Job Losses and Financial Costs if Rosebank Licence is Revoked

The company developing the United Kingdom’s largest undeveloped oil field has informed a court that rescinding its permit would result in the loss of thousands of jobs and hundreds of millions of pounds. Environmental campaigners are challenging the UK government’s decision to approve the Rosebank field off Shetland and the Jackdaw gas field in the North Sea. Equinor, which co-owns Rosebank with Ithaca Energy, stated it is investing £2.2bn in the project, creating employment for 4,000 individuals. Shell, the owner of Jackdaw, indicated that cancelling its licence would also lead to the squandering of substantial funds and have a detrimental effect on employment. John MacGregor KC, representing Equinor, conveyed to the judicial review at the Court of Session in Edinburgh that “certainty and predictability is critical in highly-regulated industries.” He further stated, “Those making major investment decisions need to be able to ascertain the risk of proceeding.” Documents submitted to the court indicate that production at Rosebank is anticipated to commence in 2026/27. Jackdaw received approval in June 2022 and Rosebank in September 2023, with both decisions made under the previous Conservative administration. As part of the consenting process for these fields, the UK government was mandated to evaluate environmental impact assessments, which were supplied by the involved corporations. These assessments considered emissions generated during the extraction of oil and gas but excluded the greenhouse gases emitted when the fossil fuels are ultimately combusted, referred to as downstream emissions. Subsequently, the UK Supreme Court determined, in a legal matter concerning proposals to drill an oil well close to London’s Gatwick Airport, that downstream emissions must be incorporated into an environmental impact assessment. Before the Court of Session, Equinor, Ithaca Energy, Shell, and the government collectively acknowledge that the Supreme Court’s decision implies the permits for Rosebank and Jackdaw were issued improperly. However, the companies assert they submitted comprehensive and precise environmental evaluations in good faith, adhering to the legal understanding prevalent at that time; they claim the government explicitly instructed them not to evaluate downstream emissions; and they contend they should not be “punished” for a Supreme Court verdict which they state was unforeseeable. Consequently, they are requesting that the judge, Lord Ericht, permit them to proceed with preparations for initiating production in the fields. Christine O’Neill KC, representing Shell, informed the court that operations at Jackdaw are projected to occur between 2026 and approximately 2034. She stated that the corporation is allocating £1.1bn to the venture, generating employment for “at least 1,000 people” from 2023 to 2025. She further remarked that if the project were halted, it would signify that “more than three quarters of a billion pounds that’s already been spent will have been wasted.” Ms O’Neill also noted that even a suspension lasting 12 months would probably incur costs for Shell of “at least £200m.” Environmental organizations Greenpeace and Uplift, the plaintiffs in this case, are requesting an immediate halt to the projects pending further evaluations concerning downstream emissions from the fields. Should Lord Ericht rule in favor of the activists, the ultimate determination regarding the continuation of oil and gas extraction could fall to the Energy Secretary, Ed Miliband. The proceedings in Edinburgh are ongoing, but a verdict is not anticipated for several weeks or months.