The government has today welcomed the decision by regulators to approve the new Rosebank development – with the UK’s highly skilled oil and gas industry strengthening energy security and growing the economy.
While the government is scaling up homegrown clean energy sources such as offshore wind and nuclear, the UK still relies on oil and gas and this will continue to be the case over the coming decades. As the government takes forward a pragmatic, proportionate and realistic response to the path to net zero, a key part of this will be maintaining our domestic oil and gas industry which underpins our energy security and boosts the UK economy.
The oil and gas industry adds £17 billion annually to the economy, supports around 200,000 jobs, and will provide around £50 billion in tax revenue over the next five years, which can be used to support the shift to cleaner forms of energy.
According to Equinor’s estimates, the Rosebank project represents a direct investment of approximately £8.1 billion, of which £6.3 billion is likely to be invested in UK-based businesses, with the developer also estimating that at its peak the field producing 69,000 barrels of oil and 44 million cubic feet of gas per day.
This will have wide-reaching benefits, including supporting UK jobs and supply chains associated with the offshore sector. The carbon footprint of domestically producing UK gas is also around one-quarter of the carbon footprint of importing internationally produced liquified natural gas.
The Rosebank development – as well as other oil and gas projects – has been subject to extensive scrutiny by the regulators, including undergoing a detailed environmental impact assessment process and a period of public consultation before approval was granted.
All new projects, including Rosebank, will be in line with the natural decline of the North Sea basin.
New projects like Rosebank are expected to be significantly less emissions intensive than previous developments, as they are more efficient and are developed with measures to mitigate emissions. Even when we’ve reached net zero in 2050, the Climate Change Committee say that a quarter of our energy needs will come from oil and gas, but the choice is between it coming from hostile states rather than from the supplies we have here at home.
In addition, the North Sea Transition Authority (NSTA) has net zero regulation embedded throughout the entire project lifecycle and considers several factors, sometimes collectively referred to as an ‘effective net zero test’, for decisions such as approving new field developments.
Continued North Sea production is important for maintaining domestic security of supply and making the UK less vulnerable to a repeat of the energy crisis that caused prices to soar after Russia’s illegal invasion of Ukraine. Furthermore, the oil and gas supply chain – which will help deliver new developments like Rosebank – is exactly the supply chain the UK needs for the energy transition. The sector is playing an important role in driving the development and delivery of low-carbon technologies that will underpin the transition.
Energy Security Secretary Claire Coutinho said in response to the decision:
“We are investing on our world-leading renewable energy but, as the independent Climate Change Committee recognise, we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank.
The jobs and billions of pounds this is worth to our economy will enable us to have greater energy independence, making us more secure against tyrants like Putin.
We will continue to back the UK’s oil and gas industry to underpin our energy security, grow our economy and help us deliver the transition to cheaper, cleaner energy.”
Chancellor of the Exchequer Jeremy Hunt said:
“We are accelerating renewables and nuclear power, but will still need oil and gas for decades to come – so let’s get more of what we need from within British waters.
Rosebank has been a huge untapped resource and now this investment will bring in billions of pounds into our economy to help secure our future energy supply.
With this decision, we’re giving investors the confidence they need to invest here, produce here, export from here – and secure thousands of jobs for Britain’s workers.”
Following Putin’s illegal invasion of Ukraine, the UK Government took swift action – ending all imports of Russian fossil fuels, with the latest figures showing the UK has not imported any Russian gas in over a year.
On top of this, the government published the British Energy Security Strategy, with a plan to supercharge domestic renewable energy and nuclear capacity, as well as supporting our North Sea oil and gas industry as we transition to lower carbon energy.
The oil and gas sector’s significant investment, skilled workforce, strong supply chains and specialist engineering expertise collectively build our ability and capacity to exploit the UK’s resources and support overall energy security of supply.
The government’s plan to power up Britain builds on the UK’s excellent progress scaling up renewables, with 40% of our electricity now coming from renewable sources.
The UK is home to the world’s four largest offshore wind farms and the government has set out plans to expand nuclear power, with an ambition of up to a quarter of the country’s electricity coming from nuclear by 2050.