Rosebank: UK Government fails to reap benefits of net zero

Condemnation has been piled on the UK Government, including from Humza Yousaf, for its inevitable decision to approve controversial plans to open up the largest untapped oil field in the North Sea.

But despite the obvious concern that burning more fossil fuels will undermine efforts to cut carbon emissions and reach legally binding targets, along with the short-sighted decision to push other key environment pledges further into the future, the UK Government risks failing to reap the economic benefits that net zero will bring.

The least surprising part of this story is that the UK Government has approved Rosebank.

The Conservative Party, under Rishi Sunak’s leadership, appears incredibly keen to ignore the climate crisis by taking a series of short-term decisions for political gain.

But once again, the fossil fuel fanatics in the Tory Party risk speaking to themselves rather than the country.

A YouGov poll, published in tandem with the Rosebank decision, found that 42% would prefer to wind down the oil and gas sector, compared to just 33% in favour of exploiting economic opportunities.

Only one in 10 UK adults buy the flimsy argument from the UK Government that more oil produced will reduce energy bills. It will not.

Putting off tough decisions now will only mean that action needed in the coming decades will have to be more drastic and radical.

For Rosebank, it is quite obvious that taking more oil and gas out of the ground and burning it will be bad for the already damaged climate.

Earlier this week, the International Energy Agency unquestionably warned that any new fossil fuel developments are “incompatible” with keeping global warming below 1.5.

On his visit to Scotland earlier this year to announce that new oil and gas licences will be granted, the Prime Minister claimed that home-grown fossil fuels are less carbon-intensive than those imported from overseas.

This is not the case.

UK North Sea oil fossil fuels are less polluting than the dirtiest form of gas, Liquified Natural Gas (LNG).

A soar in LNG imports in recent years has largely been due to Europe turning its back on Russian fuels, with the UK acting as a processing plant for EU supplies of LNG from the United States.

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But importantly, Norwegian imports, which make up 34% of UK gas supplies, are cleaner for the environment than our home-grown gas, which makes up 38% of supplies, according to data for 2022.

A study from the Institute for Public Policy Research found that no new oil fields and accelerating the rollout of renewables would cut imports of oil by 12% and gas by 17%.

Quite obviously, the cleanest strategy is to wind down the industry and crucially, our demand for oil and gas, and replace this with renewables or nuclear power.

There are plenty of economic benefits to net zero and renewables that could be exploited by the UK Government if it embraced a sensible move away from burning fossil fuels, as it demanded developing countries do, when it hosted COP26 two years ago.

Historically, tax reliefs handed out to oil and gas companies have exceeded the revenue the industry brings in.

The International Energy Agency has also highlighted that global efforts to keep warming below 1.5 degrees could save up to $12 trillion by 2050 and create more jobs than are lost in the transition.

There is plenty of money to be made in the UK and Scotland’s move to net zero – it is a capitalist’s dream.

New technologies, renewable and cheaper fuels will be the backbone of Scotland’s future economy – with Scotland well placed to scale up renewables such as tidal power, while the Scottish Government is keen to be an exporter of green hydrogen.

Labour’s policy on oil and gas is to halt new oil and gas licences in the North Sea, on climate grounds.

But crucially, Labour will not reverse any decisions made by the current UK Government – a convenient get-out clause, passing the dirty work onto Tory ministers.

This will be seen as cowardice, again, from Labour – but plays into Sir Keir’s strategy of trying to please everyone, even if it risks pleasing no-one.

For Humza Yousaf and the Scottish Government, the strongest opposition to Rosebank being fired out once it has been approved, will be perceived by some as an easy way out.

Amid the PM rolling back net zero pledges, the timing of the Rosebank decision has been kind to Mr Yousaf – helping him clearly place his administration on one side of the climate crisis and the UK Government on the other.

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The FM receives criticism from political opponents anytime he speaks out against new oil and gas developments, accused of throwing workers on the scrap heap.

Mr Yousaf does have the economy to worry about and it is clear that oil and gas jobs are a significant part of that – but those highly-skilled workers will be vital to cleaner industries taking the place of fossil fuels.

The Scottish Government has drawn up just transition plans for oil and gas workers – they are very much a part of Mr Yousaf’s move away from supporting fossil fuels.

The SNP’s economic strategy had largely been based around Scotland’s oil. Now it is based around Scotland’s renewables and energy capabilities.

Hating dirty fuels does not mean hating the economy.

The Scottish Government’s delayed energy strategy has still not been published. The draft document proposed a presumption against new oil and gas developments being approved and potentially accelerating the transition away from fossil fuels to better tackle the climate crisis.

Keeping those bold aims as Scottish Government policy would send a clear message that Mr Yousaf’s stance against new fossil fuels is legitimate and not just an easy opportunity to take a pop at the UK Government.