UK must reconsider Shell and Equinor's North Sea gas, oil projects, court rules

LONDON (Reuters) - Britain's approvals for two vast North Sea oil and gas fields were overturned by a Scottish court on Thursday, in a significant win for environmental campaigners which casts doubt on the future of new fossil fuel projects in the UK.

Shell and Equinor fought to uphold approval for the projects in the face of challenges by Greenpeace and Uplift, which argued the approvals unlawfully failed to take into account the emissions that would come from the oil and gas being used, known as downstream emissions.

The Court of Session in Edinburgh ruled that, as Britain's decisions to approve the projects were unlawful, the decisions must be retaken.

"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," Judge Andrew Stewart said in a written ruling.

Stewart allowed the three companies to continue work on the projects, but added that "no oil or gas may be extracted" until the government retakes the decisions.

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

The spokesperson added: "Swift action is needed from the government so that we and other North Sea operators can make decisions about vital UK energy infrastructure."

Equinor said it was "pleased with the outcome which allows us to continue with progressing the Rosebank project while we await new consents".

LANDMARK RULING

The judicial reviews by Greenpeace and Uplift came after a landmark ruling by the United Kingdom's Supreme Court which said planning authorities must consider the impact of burning, rather than just extracting, fossil fuels when approving projects.

This prompted Britain to announce it would not defend Greenpeace and Uplift's cases, having also dropped its opposition in other, similar cases.

The government said in response to the Scottish ruling that it would provide new guidance in the spring which would allow developers to seek fresh approvals from the regulator under revised rules that take into account last year's ruling.

"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,” a Department for Energy Security and Net Zero spokesperson said.

Greenpeace hailed the ruling as a "historic win", with senior campaigner Philip Evans saying in a statement: "The age of governments approving new drilling sites by ignoring their climate impacts is over."

Shell is developing the Jackdaw gas field, which it previously said could provide enough fuel to heat 1.4 million homes, while Equinor and its partner Ithaca Energy are developing the Rosebank oil and gas field.

All three companies say the projects are vital to Britain's energy security and that delays would lead to huge financial costs and lost jobs.

North Sea fossil fuel production has declined sharply since its peak in the late 1990s and the Labour government has said it will not issue any new oil and gas licences as it strives to reduce the country's fossil fuel use to help meet its climate targets.

"(The government) should use this moment to set out a new path for the North Sea, reaffirming their commitment to no new oil and gas, and prioritising clean energy," said Greenpeace's Evans.

Tessa Khan – executive director of Uplift, whose challenge only related to Rosebank – said the government must reject any effort to push the project through.

"To do otherwise would undermine its ambitious clean growth plans."

The ruling comes a day after finance minister Rachel Reeves set out her plans to grow the economy, saying she would seek to cut back regulation and legal cases that throttle investment.

Shell, Equinor and Ithaca last year accepted that the approval of the Jackdaw and Rosebank fields were unlawful because downstream emissions were not considered, but asked the Court of Session to nonetheless not overturn their approval.

(Reporting by Sam Tobin in London, additional reporting by Susanna Twidale; Editing by Elaine Hardcastle and Jan Harvey)