Future of new oil and gas projects in UK thrown into doubt after landmark Supreme Court ruling

20 June 2024, 11:33 | Updated: 20 June 2024, 11:36

The court ruling could threaten the future of oil and gas projects.
The court ruling could threaten the future of oil and gas projects. Picture: Alamy

By Jenny Medlicott

Emissions created by burning fossil fuels should be considered when granting planning permission for new drilling sites, the Supreme Court has ruled.

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Under the planning law, it had been assumed that only the impact of emissions from extracting the oil should be considered in planning applications for new extraction projects, not the subsequent burning of fossil fuels too.

The court ruling means that the future of new oil and gas in the UK has been thrown into doubt.

While the ruling does not prohibit new drilling it is something that companies will have to consider when looking at future projects.

The ruling could also have an impact on offshore oil and gas projects because while planning rules offshore are different, they still require Environmental Impact Assessments (EIAs).

The case was brought against Surrey County Council by Sarah Finch, acting on behalf of Weald Action Group, over the council’s decision to allow the expansion of an oil well site at Horse Hill, near Horley in Surrey, in 2019.

She challenged an earlier Court of Appeal ruling dismissing her case, having also lost a legal battle in the High Court.

The council challenged the appeal, arguing that the law did not require it to consider "downstream" emissions as part of the assessment.

It said it had followed planning law.

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Sarah Finch brought the case against Surrey County Council's decision to allow the expansion of an oil well site at Horse Hill.
Sarah Finch brought the case against Surrey County Council's decision to allow the expansion of an oil well site at Horse Hill. Picture: Alamy

But in a ruling on Thursday, Supreme Court justices ruled three to two in favour of allowing her appeal and quashed the decision to grant planning permission for the site.

Judges ruled the local council failed to assess the impacts the project would have on the surrounding area.

In his judgement, Lord Leggatt said "it seems to me plain" that emissions created by burning oil extracted at the site "are effects of the project", and as a result "it follows that the council's decision was unlawful".

In a ruling backed by Lord Kitchin and Lady Rose, he said: "The reasons accepted by the council for excluding the combustion emissions from consideration and assessing only direct greenhouse gas emissions from within the well site boundary are therefore demonstrably flawed"

He continued: "In my view, there was no basis on which the council could reasonably decide that it was unnecessary to assess the combustion emissions."

Lord Leggatt continued that he could see "no reason why combustion emissions that will occur elsewhere as a consequence of the operation of a project to extract oil should be regarded differently" from emissions generated by extracting the material.

He also said that while the law did not prevent planning authorities from approving projects which may harm the environment, the authority needed to reach a "reasoned conclusion" on the impact.

But he said it was "not a valid ground" to argue that the oil being refined elsewhere before being burned meant it did not need to be considered by the council as part of the environmental assessment.

The ruling could throw future gas and oil projects into doubt.
The ruling could throw future gas and oil projects into doubt. . Picture: Alamy

Under the plans, the oil well site, run by Horse Hill Developments, would have seen the fossil fuel extracted over 20 years, producing around 3.3 million tonnes of oil.

Climate campaign group Friends of the Earth, who supported Ms Finch during the case, estimated last year that the oil extracted from the site would emit more than 10 million tonnes of carbon dioxide when burned.

Barristers for Ms Finch told the Supreme Court in June last year that council bosses failed to assess "the indirect greenhouse gas impacts" and did not take into account environmental protection objectives.

Lawyers for the council claimed that Ms Finch's approach was "misguided" and that the environmental assessment considered the impact of "direct" greenhouse gas releases.

But Lord Leggatt dismissed the council's argument, stating that the environmental assessment showed "inadequacy" and did not allow for public debate on the impact of the plans.

He said: "It is foreseeable in today's world that, when development consent is sought for a project to produce oil, members of the public concerned will express comments and opinions about the impact of the project on climate change and the potential contribution to global warming of the oil produced."

He continued: "It is not good enough that the potential global warming effect of the proposed development was not 'completely ignored'.

"The effect should have been properly assessed so that public debate could take place on an informed basis. That is a key democratic function of the environmental impact assessment process. It was not fulfilled here."

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