THE embattled North Sea industry is facing a fresh challenge after a judge cleared campaigners to take the UK Government to court as they bid to have support for the oil and gas industry ruled unlawful.
Mrs Justice Thornton gave the go-ahead to three activists to proceed with an action in which business minister Kwasi Kwarteng and the industry regulator are named defendants.
The campaigners, who include a member of the SNP’s policy development committee, hope to force the Government to stop providing support through the tax system for an industry they reckon is effectively being paid to pollute.
They claim the support provided is unlawful because it means the Government is helping to bankroll activity that is not economic to the UK as a whole.
The value of tax breaks provided to North Sea oil and gas firms runs into billions.
Following a review of the arguments ,Mrs Justice Thornton said the activists concerned had an “arguable case” and noted: “They bring the claim in the public interest.”
READ MORE: Majority think North Sea oil and gas production should be halted
She granted permission for the claimants to apply for a judicial review of the Government’s action.
The campaigners expect the review will be completed by the High Court in London this year with a decision to follow in early 2022.
They hope success in their action could make it hard for the Oil and Gas Authority to approve projects which are likely to be a net cost to the country and rely on subsidies to make them profitable for the operators concerned.
The campaigners are backed a by a range of environmental groups including Greenpeace and Friends of the Earth Scotland. These want oil and gas activity to be curbed in order to reduce emissions that are thought to be fuelling climate change.
The groups argue that the Government’s support for oil and gas production in the North Sea is incompatible with its stated ambition to reduce UK emissions to zero by 2050, net of amounts absorbed.
They say production that relies on such support should be stopped.
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“A just transition away from fossil fuels is crucial for workers and communities in Scotland but that won’t be delivered through continued cash handouts to oil giants,” said Richard Dixon, director of Friends of the Earth Scotland.
“The Government must create a rapid transition to green energy with workers and communities and redirect public money into building alternative industries and guaranteeing decent, green jobs.”
The prospect of the legal action comes at a time when firms in the North Sea are facing huge challenges amid the fallout from the pandemic.
Oil and gas firms slashed spending in the North Sea after commodity prices plunged in response to the imposition of lockdowns around the world.
While oil prices have risen to above pre-pandemic levels in response to the rollout of coronavirus vaccines, industry sentiment is fragile.
Trade body OGUK argues oil and gas firms provide essential energy resources for the UK and can play a key role in the development of green energy sources such as offshore windfarms.
Mike Tholen, OGUK’s sustainability director said: “The UK offshore oil and gas sector has continued to provide the energy the UK requires, enabled skilled employment and supported communities for decades. It is changing and applying low carbon thinking to all its projects to support the transition to greener, cleaner energy.”
Campaigners may hope that the prospect of curbs could prompt firms to put any plans they may have to develop new fields on hold.
Siccar Point Energy is seeking regulatory approval to evelop the huge Cambo field off Shetland with Royal Dutch Shell.
The claim was lodged by Kairin van Sweeden, who sits on the SNP’s policy development committee, Edinburgh University medical student Mikaela Loach and former oil refinery worker Jeremy Cox.
They are represented by law firm Leigh Day.
Rowan Smith at Leigh Day, said: “Our clients are perfectly entitled to ensure that the government is sticking to its commitments on net zero emissions.
“They believe that the OGA’s strategy unlawfully contradicts these commitments, and unlawfully allows production of oil and gas that does not benefit the UK economy as a whole.”
In her decision Mrs Justice Thornton said: “In my view the Claimant has presented an arguable case on whether the OGA’s definition of ‘economically recoverable’ in its strategy is consistent with the statutory term “maximising the economic recovery of UK petroleum””.
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