North Sea oil and gas licences quashed as judge brands them 'unlawful'

30 January 2025, 10:35 | Updated: 30 January 2025, 11:18

Two oil fields in the North Sea have had their licences to drill stopped by Scotland's highest court.

Consent for the Jackdaw and Rosebank fields - given by Rishi Sunak's government - has been branded unlawful by the Court of Session in Edinburgh.

The ruling states that permission was granted without taking into account the climate impact of burning the fuel the fields would produce.

As a result no drilling can go ahead until new consents are granted by the new Labour UK government, which is yet to produce its own environmental guidelines for oil and gas.

Greenpeace and Uplift brought the legal challenge over the previous Conservative government's decisions to give approval to the Rosebank oil field north west of Shetland and the Jackdaw gas field off Aberdeen.

They argued the UK Government and North Sea Transition Authority (NSTA) had acted unlawfully when granting consent as environmental impact assessments did not take into account downstream emissions resulting from the burning of the extracted fuels.

In his judgement Lord Ericht said the decision to grant consent was unlawful, and ruled the consent should be "reduced" (quashed) and reconsidered.

In his published opinion, he said: "Having considered all the circumstances of the case and the various public and private interests, I have reached the conclusion that the balance lies in favour of granting reduction.

"The public interest in authorities acting lawfully and the private interest of members of the public in climate change outweigh the private interest of the developers.

"The factors advanced by Shell, Equinor and Ithaca in respect of their private interest do not justify the departure on equitable grounds from the normal remedy of reduction of an unlawful decision.

"The decisions will be reduced, and can be taken again, this time taking into account downstream emissions."

He said there was a public interest in having the decision "remade on a lawful basis" because of the effects of climate change.

"The effect of the burning of fossil fuels on climate change and the lives of individual persons is now well recognised in law," he said.

The former UK government had approved Shell's proposals to develop the Jackdaw field in 2022, and cleared Equinor and Ithaca Energy's plans to drill in the Rosebank field in September 2023.

The new Labour government did not fight the legal challenge, but the companies involved did defend their right to drill.

Today Lord Ericht ordered that the licences be suspended pending the Secretary of State's re-consideration of the matter, which he said would give the companies "options" on how to proceed in the interim.

However, he said no oil or gas should be extracted before a new decision on consent is made.

Philip Evans, senior campaigner at Greenpeace UK, said: "This is a historic win - the age of governments approving new drilling sites by ignoring their climate impacts is over.

"The courts have agreed with what climate campaigners have said all along: Rosebank and Jackdaw are unlawful, and their full climate impacts must now be properly considered.

"Fossil fuels are an economic dead end. Now that the ball is back in the government's court, ministers have the opportunity to sort out the legal mess left by their predecessors."

Tessa Khan, executive director of Uplift, said: "This is a significant win which means that Rosebank cannot go ahead without accounting for its enormous climate harm.

"The continued burning of oil and gas is why we are seeing more extreme weather like Storm Eowyn and flooding that have claimed lives and caused hundreds of millions of pounds in damage and clean-up costs, not to mention the devastation it's causing in other countries.

"Most people are now joining the dots with endless oil and gas drilling and are worried about the future."

A Shell spokesperson called for swift action from the Government in response to the ruling.

The spokesperson said: "Today's ruling rightly allows work to progress on this nationally important energy project while new consents are sought.

"We have spent more than £800 million since the regulator approved Jackdaw in 2022. Swift action is needed from the Government so that we and other North Sea operators can make decisions about vital UK energy infrastructure.

"When operational, Jackdaw would provide enough fuel to heat 1.4 million UK homes, at a time when older gas fields are reaching the end of their production and the UK is reliant on imported gas to meet its energy needs."

An Equinor spokesperson said: "We welcome today's ruling and are pleased with the outcome which allows us to continue with progressing the Rosebank project while we await new consents.

"Rosebank is critical for the UK's economic growth, with an estimated 77% (£6.6bn) of total direct investment benefiting UK businesses.

"Equinor and its Rosebank JV partner, Ithaca, have already committed over £2.2bn on developing Rosebank - awarding vital contracts across the supply chain and employing personnel to deliver the work."

Ithaca has been approached for comment.

A Department for Energy Security and Net Zero spokesperson said: "The government has already consulted on revised environmental guidance to take into account emissions from burning extracted oil and gas to provide stability for industry, support investment, protect jobs and deliver economic growth.

"We will respond to this consultation as soon as possible and developers will be able to apply for consents under this revised regime.

"Our priority is to deliver a fair, orderly and prosperous transition in the North Sea in line with our climate and legal obligations, which drives towards our clean energy future of energy security, lower bills, and good, long-term jobs."

Scottish Greens MSP Mark Ruskell said the decision was welcome, but that the current UK government must now revisit all licences granted by its predecessor.

He said: "I'm delighted at the decision because it respects the climate science. The companies developing oil and gas should have done this work early on - and the previous Westminster government should have demanded it.

"Of course the oil and gas extracted will be burned, and of course it will have a massive impact on our environment. So not to have done the work to assess that impact was irresponsible.

"Now the Westminster government should look back at the decisions made by the previous government about oil and gas licenses and open them up to review as well."

However Scottish Conservative energy spokesman Douglas Lumsden MSP said: “This decision is a hammer blow for the North Sea oil and gas industry, which is so crucial for our economy and energy security.

“Labour abandoned tens of thousands of highly skilled workers by refusing to defend this case. They must now belatedly show some common sense and back the sector.

“The majority of Scots support continued oil and gas production in the North Sea because they recognise it supports jobs and that, without it, we’d be more reliant on importing fossil fuels from abroad with a far greater carbon footprint.

“Labour’s reckless hostility to the industry – which is shared by the SNP, Greens and the Liberal Democrats – saw BP recently announce thousands of job losses.

“The Scottish Conservatives are the only party at Holyrood standing up for North Sea oil and gas and the North East communities that rely upon it.”

A Scottish Government spokesperson said it was "taking the time to carefully consider the court rulings announced today" and added: “Decisions on offshore oil and gas licensing and consenting are currently reserved to the UK Government.

"We have been consistently clear that the UK Government should approach these decisions on a rigorously evidence-led, case by case, basis – with robust climate compatibility and energy security being key considerations.”