A significant legal decision has impacted two major oil and gas projects in the North Sea, developed by Shell and Equinor. A Scottish court ruled against the approvals granted by the UK’s Oil and Gas Authority (OGA), citing the government’s failure to evaluate the climate impact of emissions resulting from the combustion of fuels extracted from these projects. Although the court allowed preparatory work to continue, it imposed a ban on actual oil and gas production until the environmental assessments are revised.
Why were these approvals overturned?
The legal challenge was initiated by environmental groups Greenpeace and Uplift, who contended that the Environmental Impact Assessments (EIAs) for Shell’s Jackdaw project and Equinor’s Rosebank project inadequately addressed downstream emissions. They argued that the government had neglected its responsibility to assess the long-term climate consequences of burning these fossil fuels. Lord Ericht, who presided over the case, highlighted the importance of lawful decision-making and the public interest in mitigating climate change when delivering the ruling.
How will this ruling affect North Sea oil production?
The suspension of extraction activities for these projects could have broad implications for North Sea oil and gas production. Shell’s Jackdaw field, located roughly 250 kilometers east of Aberdeen, was projected to supply energy to 1.4 million UK homes beginning next year. Similarly, Equinor’s Rosebank field, estimated to hold over 300 million barrels of oil equivalent, was expected to contribute 7% of the UK’s oil output through 2030. The ruling places these plans in uncertainty, potentially affecting the UK’s energy strategy.
Shell, in response to the ruling, emphasized the significant investments it has already made in the Jackdaw project, totaling over £800 million. The company urged the government to act swiftly to provide clarity on the future of the project. Shell stated,
“Swift action is needed from the Government so that we and other North Sea operators can make decisions about vital UK energy infrastructure.”
Similarly, Uplift’s Executive Director Tessa Khan celebrated the outcome, stating,
“The continued burning of oil and gas is why we are seeing more extreme weather like Storm Eowyn and flooding… Most people are now joining the dots with endless oil and gas drilling and are worried about the future.”
Similar controversies have surrounded North Sea oil projects in recent years. For example, Shell’s decision to withdraw from the Cambo oil field in 2021 followed a backlash over its environmental impact. The ongoing resistance underscores the tension between the UK’s energy needs and its climate commitments. Unlike the Cambo case, where Shell voluntarily paused development, the current ruling legally halts operations until emissions are reassessed.
The court’s decision emphasizes the growing scrutiny surrounding fossil fuel projects and the need to balance energy security with environmental responsibilities. With increasing pressure from climate advocates and public opinion, the energy industry may face more stringent legal and ethical challenges in the future. For Shell and Equinor, the ruling signals the necessity of aligning their projects with evolving sustainability standards, as failure to address environmental impacts could result in further delays and legal risks.
