Contribution
With your permission, Mr Speaker, I will now make a statement on the offshore Jackdaw gasfield and the Government’s approach more broadly to North sea oil and gas. This supplements the written ministerial statement that I made to the House on the topic earlier this morning.
The original grant of consent for the Jackdaw project, made in 2022 under the previous Government, was judged to be unlawful and was quashed by the courts. This was because emissions from the burning of extracted gas were not considered, and it therefore did not assess the full environmental impacts of the project. My right hon. Friend the Energy Secretary and the regulator have now retaken the relevant decisions, fully taking into account environmental impacts.
Today, I can inform the House that the Energy Secretary has decided in favour of the project and that the regulator, the North Sea Transition Authority, has now granted consent for gas to be produced at the licensed Jackdaw field. Given that the court permitted the developer to continue development at risk until a new consenting decision was made, the project will therefore start to supply gas to British homes and businesses by as soon as the end of this month.
In reaching her decision, the Energy Secretary considered all relevant information in the round. She looked at the project’s expected benefits to the UK, including its contribution to energy security, employment, impacts on other energy infrastructure and other economic benefits, and carefully weighed them against the potential environmental effects, including the effects relating to greenhouse gas emissions. The full reasons for our decisions are set out in detail in the decision document, which was published on gov.uk.
I want to assure the House that the Government remain committed to tackling the climate crisis and to moving away from fossil fuels and towards renewable and nuclear energy. The recent heatwaves and weather events we have seen demonstrate why that is critical, and the Secretary of State will be leading the UK delegation to COP next month to drive global action and build a credible pathway back to 1.5° of warming.
I want to be clear that this project will not prevent the UK from being able to meet its legally binding limits on carbon emissions and achieve net zero by 2050. But even on the path to net zero, the UK will still require oil and gas as part of our energy needs for decades to come. This decision is consistent with the Government’s manifesto commitments to end new licences, explore new fields and support the management of existing fields for their lifespan.
The Chancellor and the Energy Secretary have also announced that the Government will establish a new North sea energy wealth fund, which will use tax revenues from North sea oil and gas to invest in net zero projects and support the green transition. This will start with an initial £2 billion capital injection of funding, with future revenues from the North sea flowing into the fund over time. It will support our plans to delink gas and electricity over the course of the Parliament, ensuring that home-grown renewables and low-carbon power set the price of electricity far more than gas, helping to protect households and businesses from volatile fossil fuel markets and bring down bills for good.
The North sea future plan set out our approach to securing a managed, orderly and prosperous transition and set out how we will deliver our manifesto commitment to support the management of existing fields by introducing transitional energy certificates, and we will legislate for those reforms when parliamentary time allows.
However, a small number of tieback projects face urgent investment and operational decisions now, and I have therefore asked the North Sea Transition Authority to consider whether any such projects could benefit from similar measures now, before the legislation is in place. This is a limited interim arrangement for urgent cases where operators can demonstrate committed investment, credible delivery plans and near-term activity. Any decision will remain for the NSTA, in accordance with its statutory responsibilities.
Timely decommissioning is important for both the environment and the economy, and this Government are keen to unblock and progress decisions in a timely way. I can also announce today that the regulator has invited the decommissioning programme for the Brent installations, marking an important step in restarting another regulatory process that has been on hold for years.
My officials are also beginning discussions with industry leaders on a refresh of the North sea transition deal to ensure that future domestic oil and gas production continues to benefit the UK and to build the energy industries of the future. First agreed in 2021, the deal aims to provide a clear path for the industry to support the UK in reaching net zero carbon emissions by 2050, while protecting jobs and supporting energy security.
Finally, as the Prime Minister said a few moments ago, we are looking at removing standing charges on gas bills at the earliest opportunity.
Today’s decision means that we will get more power flowing directly into British homes and businesses this winter as we continue our transition to renewables. I commend this statement to the House.