Eighty miles north of Shetland lies the largest untapped source of oil in UK waters: Rosebank. This week, the UK government has approved drilling for its 300 million barrels of oil. For context, Saudi Arabia would pump that amount out every 25 days. For further context: once burned, that will be equivalent to the combined annual emissions of 28 low-income countries home to 700 million people, as the outgoing Green MP Caroline Lucas told the Environmental Audit Committee in June.
The move has caused intense consternation. Lucas called the decision a “moral obscenity”, adding that new drilling will make no real difference to energy and fuel costs for UK consumers because the oil will be sold at world market prices.
While the government says it’s still committed to net zero carbon emissions by 2050, the independent Climate Change Committee (CCC) said in a report in June that the continuing short and medium-term need for oil and gas “does not in itself justify the development of new North Sea fields”. As if that wasn’t enough, the International Energy Agency (IEA) agrees.
It seems like “drill, baby, drill” and “net zero by 2050” mix like oil and water.
Justifying the move, the new Energy Secretary, Claire Coutinho, has talked about “energy security” and reducing reliance on assorted despotic regimes like Russia and the Saudis. But currently around 80 per cent of North Sea oil is exported rather than staying in Britain for domestic use – hardly contributing to a sturdy, self-reliant UK plc, according to critics. It’s all part of the government’s dilution of its climate pledges – or as Rishi Sunak would put it, the “honest conversation” with the British people about the costs of the green transition.
Given all this, Labour has taken the brave step of saying it doesn’t support Rosebank’s approval, but that it would not revoke the license if/when the party enters Downing Street. What’s more, the Labour grandee and former prime minister Gordon Brown went on ITV’s Peston to argue that it was “the right decision that Labour and the Conservatives both support it”.
“As long as we’re on a trajectory to cut the use of carbon,” Brown continued, “then you’ll have to have either oil from Saudi Arabia or oil from the North Sea.” It was a supreme example of a politician explicitly linking the net-zero transition to temporary (but apparently necessary) measures to boost fossil fuel extraction, against the weight of evidence from expert advisory organisations like the CCC and IEA.
This kind of contradictory, dual-pronged approach seems to be a hallmark of the centre left. Joe Biden has won plaudits from lefties around the world for his government’s major investment in the green economy, and its pro-labour approach. At the same time, Biden has approved oil and gas drilling at a faster rate than his predecessor, Donald Trump. US energy exports to Europe (in the form of liquefied natural gas shipments) have boomed in the wake of the war in Ukraine.
Brown’s justification for his (and his party’s de facto) support for Rosebank was telling: he said it was “better for balance of payments”. Balance of payments is the difference between what the country imports and exports. A balance of payments deficit on a country’s current account signals that it’s producing less than it’s consuming, which can only be sustained if countries in surplus are lending money to cover the difference. In this new “securonomic” era (as heralded by Rachel Reeves, the shadow chancellor), the question of where something is produced, and who produces it, has returned to prominence, after decades in which open markets and globalised supply chains were thought to be the inevitable future.
For its supporters, Rosebank will provide more money to the UK exchequer than importing, it will create 1,600 jobs (likely pleasing unions like Unite and GMB), and it will contribute to a more positive balance of the UK’s current account (which has long been in deficit). Detractors point out that the main contractor, the state-owned Norwegian firm Equinor, will enjoy billions in tax breaks and capital allowances. The company, for its part, says it will pay a 75 per cent tax on its profits until 2028.
But what is certain is that, as much as politicians want it to be the case, it’s not possible to reconcile the net-zero transition with new drilling. Honesty would require leaders to admit they are prioritising certain economic or political goals over climate targets. That circle cannot be squared.
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