About 80 miles west of the Shetland Islands, on the shores of the North Atlantic, the largest undeveloped oil field in British waters lies deep beneath the waves.
Rosebank contains approximately 300 million barrels of recoverable oil, although transportation could be as high as 500 million barrels by some estimates.
A licensing decision for the field, which is being developed by Norwegian giant Equinor, is expected to be released by regulators this month.
It has set up a litmus test for the future of the North Sea, with supporters and critics watching closely to see what the government decides.
If approved, Rosebank could be the last new oil development in British North Sea history.
Labour, who currently hold a huge lead in the polls, are planning a blanket ban on all new oil and gas development if the party wins power.
Rosebank would not be affected by the Labor ban, as the license – if approved – would be granted before it takes effect. But it has become a microcosm of the larger issues.
The scheme is described as reckless or vital – depending on who you ask.
If approved, the field would begin production at the end of 2026 and continue until 2050. At its peak, it would supply around 70,000 barrels of oil a day – or 8% of the UK’s total needs – and 60 million cubic feet of gas per day.
Equinor expects Rosebank to add £24 billion to the UK economy and create 1,200 jobs in the UK at its peak, including 255 permanent positions within the business.
However, climate campaigners say the project exceeds UK net-zero targets, won’t do much for household energy bills or energy security as 80% of its output will go to refineries in the UK. abroad and will require huge public subsidies.
“If we want a livable climate, we cannot authorize new oil and gas projects or permits,” says the Stop Rosebank group.
Ed Miliband, Labour’s shadow energy secretary and former party leader, has publicly opposed any new development for similar reasons.
Instead of drilling new oil and gas wells, according to Labor sources, the UK should make the “most efficient use” of its existing reserves.
At the same time, Labor has pledged to borrow £28billion a year to invest in renewable energy projects such as wind and solar farms, which it says will generate tens of thousands of jobs.
Sir Keir Starmer has often criticized Margaret Thatcher’s “callous” decision to close dozens of British coal mines in the 1980s, which he blames on economic malaise in former mining towns.
The Labor leader says he will not repeat the same mistake twice and will save jobs in the North Sea oil and gas industry as the country switches to renewable energy.
“Many people in well-paying, secure jobs in oil and gas are worried about what will happen if we make the transition,” he told business leaders at a conference of the British Chamber of Commerce (BCC) last month.
“The worst thing we can do is not take this seriously. The worst thing you can do is not engage with them, [not] have a plan that everyone trusts and do what happened at the end of coal mining, which is basically tell people “I’m sorry…we’re going to before, you’d better get on your bike”.
“The effects of this are still being felt in communities across the country and we must never make that mistake again.”
Yet Equinor and industry representatives say investment in renewables will not be enough to meet Britain’s immediate energy needs.
They insist that Rosebank and similar programs are factored into Britain’s “carbon budget” and will make a vital contribution to British and European energy security in the wake of the war in Ukraine.
And while much of the oil produced will go to the Continent, it is then sent back to Britain in refined form.
Domestic production is particularly important for the UK, industry bosses say, as the UK still depends on fossil fuels for three-quarters of its energy needs. It produces about half of its oil and gas supplies domestically.
The North Sea is already in natural decline, with its remaining reserves becoming harder and more expensive to extract.
At the same time, the share of fossil fuels in the energy mix is gradually decreasing, which means that we will have to import more in the years to come to meet demand.
New wells are therefore needed to keep the oil flowing and prevent Britain from becoming increasingly dependent on imports, says David Whitehouse, chief executive of lobby group Offshore Energies UK.
“While we still use oil and gas in the UK, every barrel we choose not to produce here in the UK will simply come from somewhere else,” he adds.
“It means that we will export our jobs. This means that we import oil and gas from other countries that do not have the same commitment to climate change as we do.
“So from my point of view, it’s absolutely in line with the IEA [recommendations] that we continue to develop domestic oil and gas.
He says UK producers are already taking bigger steps than their global counterparts to reduce emissions from extraction.
For example, at Rosebank, Equinor has committed to using a floating production vessel that will eventually be fully electrified, meaning it could be powered by wind power.
“This is an industry that is absolutely looking to ensure that ours is the cleanest oil produced in the world,” adds Whitehouse.
“There are tremendous efforts underway with the industry to achieve this.”
The North Sea Transition Agreement announced by the government in 2021 aims to strike a balance, helping industry reduce emissions while gradually reskilling staff for green energy jobs.
However, Offshore Energies UK has predicted that a blanket ban on all new oil and gas development would cause North Sea oil production to fall by 60% by 2033, costing the industry at least 45,000 jobs. .
It has put Sir Keir under pressure to explain how the proposal flagged by Labor will not lead to a jobs bloodbath, with the party’s union supporters among those publicly voicing their concerns.
Sharon Graham, general secretary of Unite, which represents oil rig workers, says the Labor leader’s proposals so far lack key details.
“We cannot have a repeat of the devastation caused to workers and their communities by the closure of coal mines,” she said this week.
As a decision on Rosebank approaches, Sir Keir will be forced to choose a side.
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