Campaigners are launching a High Court battle against the UK government’s “unlawful and irrational” support of oil and gas drilling in the North Sea.
A medical student, the daughter of an oil worker and a former Esso employee are challenging the oil industry regulator’s strategy that aims to maximise economic recovery of oil and gas from beneath UK waters.
The trio argue that continued “tax breaks” for the fossil fuel industry are unlawful. They claim that, under the Oil and Gas Authority strategy defined in February, the taxpayer is currently set to foot a £18.3 billion bill for decommissioning oil rigs, pipelines and wells, while private companies are still extracting profit from oil and gas reserves in British waters.
“Much of the UK’s oil and gas production is only economic because of public handouts,” said medical student Mikaela Loach, one of the campaigners bringing the judicial review.
“The government is paying companies billions in public money to extract every last drop of oil from the North Sea when it should be focusing on decarbonising the UK economy, meeting its international climate obligations and setting an example to the world as host of the UN Climate Summit in November.”
‘Whole World Is Watching’
In March, OGA and the UK government announced a North Sea Transition Deal aimed at decarbonising the domestic oil and gas industry, which is directly responsible for around 3.5 percent of the UK’s greenhouse gas emissions.
The government introduced a range of climate targets, such as reducing offshore production emissions by 50 percent by 2050 against a 2018 baseline to create a “net zero basin” by mid century. It also confirmed it would put an end to funding of fossil fuel projects abroad, and introduced a ‘Climate Compatibility Checkpoint’ ahead of each future licensing round to establish whether it is compatible with action to tackle the climate emergency.
However, the decision to allow the continued issuing of oil and gas licences in British waters led to accusations of “outrageous hypocrisy” by climate campaigners. Less than two months on, this judicial review indicates mounting pressure for the government to accelerate the phase-out of offshore oil and gas.
According to campaigners, BP received a net payment of £675 million between 2015-2019 from the UK government after tax, while the UK reportedly paid Shell £70 million during that time. This cost will mount further if new oil and licenses are issued, in what campaigners say directly contravenes the UK’s commitment to reach net zero emissions by 2050.
Campaign initiative Paid to Pollute, which is supporting the review against the OGA and Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy (BEIS), has also launched a petition to accompany the legal challenge.“You have already taken the bold step of ending taxpayer support for fossil fuel projects overseas,” it reads. “Now, you must do the same at home. The whole world is watching.”
Rowan Smith from law firm Leigh Day, which is representing the campaigners, said: “In some circumstances, such production is not ‘economic’ for the UK as a whole, but the OGA is still seeking to maximise it.”
“The case argues that is unlawful, having regard to the terms of the OGA’s legal duty, and also irrational, because it will result in increased levels of oil and gas production, in conflict with the UK’s legal duty to achieve net zero emissions by 2050.”
BEIS declined to comment.