GREENPEACE has failed in its bid to get a court to revoke BP’s permit for a North Sea oil field in a case which could have big implications for the industry.
The campaigning group launched an action in Scotland’s Court of Session in which it claimed that the government wrongly granted BP a permit to develop the 30 million barrel Vorlich field east of Aberdeen without it considering the climate impacts of burning the oil extracted.
A panel of judges headed by Lord Carloway ruled that the government’s decision to grant the permit was lawful.
In his written judgement Lord Carloway said decision makers were not required to consider the environmental impact of the use of oil and gas when assessing applications for field developments.
Greenpeace described the judgement as a win for the fossil fuel industry and said it would launch an appeal.
The judgement appears to represent a significant reverse for Greenpeace as it tries to get the UK Government to block proposals to develop the giant Cambo field off Shetland.
Greenpeace argues that approval for Cambo would be incompatible with the Government’s claims to be taking effective action to tackle climate change, as Glasgow prepares to host the COP 26 environmental summit next month.
The Government will likely take careful note of the judgement delivered yesterday, amid concerns about the recent surge in gas prices which Lord Carloway alluded to.
Industry body OGUK described the judgement as a victory for common sense and for the UK’s energy security.
Sustainability director Mike Tholen said: “If Greenpeace had won, it would have generated uncertainty among the hundreds of companies involved in producing the nation’s oil and gas. They might spend millions of pounds on getting a new oil or gas field licenced only to see it revoked by a court action.”
He added: “Such a ruling would make them far less willing to invest in new fields, leading directly to a sharp decline in the UK’s oil and gas production and making the UK more reliant on imports.”
In the Opinion of the Court, Lord Carloway wrote: “It would not be practicable, in an assessment of the environmental effects of a project for the extraction of fossil fuels, for the decision maker to conduct a wide ranging examination into the effects, local or global, of the use of that fuel by the final consumer.”
He added: “Although the appellants’ aspiration is for such extraction to cease, it does not appear to be contended that the UK economy is not still reliant in a number of different ways on the consumption of oil and gas.
“At present, a shortage of oil and gas supplies is a matter of public concern. The argument is, in any event, an academic one. It is not maintained that the exploitation of the Vorlich field would increase, or even maintain, the current level of consumption. Unless it did so, it is difficult to argue that it would have any material effect on climate change; even if it is possible to arrive at a figure for its contribution by arithmetical calculation relative to the production of oil and gas overall.”
Lord Carloway concluded that the question of whether North Sea developments should be allowed was one for politicians rather than the courts.
He observed: “The Secretary of State’s submission that these are matters for decision at a relatively high level of Government, rather than either by the court or in relation to one oilfield project, is correct. The issue is essentially a political and not a legal one.”
Decisions on whether fields should be approved are made by the North Sea industry regulator, the Oil and Gas Authority.
The OGA reports to the Government but says it enjoys operational independence from the Department for Business, Energy and Industrial Strategy to the fullest extent possible within the established boundaries.
It says its role is to work with the industry and government on economic recovery of the UK’s oil and gas resources, whilst also supporting the move to net zero carbon by 2050.
Firms that want to develop North Sea fields are required to submit assessments that take account of the expected environmental impact of their drilling and development operations, as opposed to the use of the output from fields.
Private equity-backed Siccar Point Energy has submitted an application for regulatory clearance to develop the Cambo field with Royal Dutch Shell.
The field is estimated to contain 800m barrels.
BP and Israeli-owned Ithaca Energy said they welcomed yesterday’s Court of Session decision, which the OGA noted.