In case you hadn’t noticed, it has been pretty hot this summer – and just about everywhere. Probably worst in Europe, but few places have escaped, except, I believe, Iceland. And the general consensus, except for the big time climate change deniers in the current American government, is that human activity is the cause. If you don’t believe me, watch the BBC documentary about Exxon (pre-Mobil) burying a report some 45 plus years ago which forecast exactly what has occurred.
But can we simply stop using fossil fuels? Hardly. Until internal combustion engines, including jet engines, are totally phased out, there will be a need for oil and gas products. Here in the UK, we might be somewhat closer at least to having most electricity generated by renewables if the Conservative government that came to power in 2010 hadn’t banned new onshore wind turbines. The argument that they would foul the view of this ‘green and pleasant land’ doesn’t hold any water – if we only had some! The view one gets when travelling around our county (Gloucestershire) is totally brown.
So this leads us to the current debate about the delayed go-ahead for the two biggest offshore projects in UK waters – Jackdaw and Rosebank – and the future of the offshore industry here. There are two issues at hand – the significance of these projects in the context of the UK economy and government accountability. Opposition to the projects, lead by Greenpeace, says that the emissions produced by these two projects are against government policy and terrible for the environment. That is probably close to the truth, but not entirely.
On the first account, Rosebank is a no-go project. It is deepwater oil which has little consequence for the economy. The oil will go into the general oil market and make little difference to UK demand. Little if any of the equipment will be sourced here and the workforce on the floater, which will also be sourced elsewhere, will be limited. Jackdaw is another story. It is gas (200mboe) which will be used to meet domestic requirements and it has been estimated that it will supply 6.5% of UK demand here at peak production. On this basis, it should go ahead. In addition, the operator Adura, the Shell/Equinor joint venture, plans to electrify the Shearwater plaform where Jackdaw fluids will be handled. This is a good thing.
The second issue is government accountability. Both projects were given early stage approval by the previous Tory government. In general terms I am against Rosebank, but in favour of Jackdaw. It is only a sensible ands expedient position. In terms of emissions, UK produced gas will be less destructive than LNG coming from elsewhere. The real issue, though, is if such decisions can be reversed when governments change, how can any industrial company take an investment decision that has a political element which is most often the case. Greenpeace should continue its opposition to new licences and new drilling plans, but denying that Jackdaw has benefits to the local economy is pointless and unrealistic.
So where does the new Burnham regime go from here? Ed Milliband has been against new offshore projects for a long time and he should continue to do so. Principles do count. Likewise if operators move on projects that have been given even early stage approval, let them continue. Adura is a pretty unpalatable organisation. Shell has pretty much written off renewables and is going hell-for-leather to make as much money as possible from fossil fuels before they can’t. But governments can’t really make u-turns on policies where investment have already been made. Does that make sense? Tell me.
