Burnham's Pragmatism Meets the Energy Trade-Offs

The decision to approve drilling at the Jackdaw gas field in the North Sea, and to postpone once more a ruling on Rosebank, are case studies in the slow-motion awkwardness Britain has had about energy for years. At its heart lie two questions: where should the country's energy come from, and at what cost, to the customer and to the environment?

Since becoming prime minister, Andy Burnham has spoken of a desire to be pragmatic about the North Sea, which is why the Jackdaw decision comes as little surprise. It felt near inevitable after Donald Trump blurted out, following his first telephone call with Burnham in the summer, that the prime minister had told him he would open up the North Sea. Burnham acknowledged the two leaders had discussed the issue, arguing that there is a resource there and that when people are struggling, you cannot ignore it. The government is now approving drilling at Jackdaw, about 150 miles east of Aberdeen. A decision on Rosebank, an oil field roughly 80 miles north-east of Shetland, is expected to take a little longer.

The history bears revisiting. Jackdaw was first approved four years ago, Rosebank three years ago. After a legal challenge by environmental campaigners, consent was ruled unlawful and a more detailed assessment of environmental impact was required. Then there is politics, international and domestic, between parties and within them. The debate turns on energy security and spiralling prices amid the wars in Ukraine and the Middle East, on emissions and on the signal new drilling sends to the world. Others point to the carbon emitted when energy is imported, the tax revenues from domestic production, and the social and economic consequences should Britain's oil and gas sector deindustrialise too quickly, particularly for cities such as Aberdeen.

For the government, there are also the promises Labour made at the 2024 general election. Page 52 of its manifesto reads like a rhetorical twister, a paragraph of pledges stretching in several directions at once. Labour would not revoke existing licences and would partner with business and workers to manage existing fields for the entirety of their lifespan, it said, adding that oil and gas production in the North Sea would be with us for decades and would be managed in a way that does not jeopardise jobs. Offshore workers would lead the world in the industries of the future. But the party also pledged not to issue new licences to explore new fields, because they would not take a penny off bills, could not make the country energy secure and would only accelerate the climate crisis. Crucially, the Jackdaw and Rosebank licences had already been issued, leaving political wriggle room on the two outstanding and high-profile decisions inherited on taking office.

The trade-offs remain very real, including for the individuals involved. Ed Miliband, the Foreign Secretary and former energy secretary, has long been vocal about the need to move away from fossil fuels. His successor, Miatta Fahnbulleh, who announced the decision, previously wrote that to have a shot at staying within 1.5C of global warming we cannot have any new oil or gas fields, adding that funding new fossil fuels was irresponsible and short-sighted when the country needed to reach net zero fast. Fahnbulleh told BBC Radio Scotland that gas from Jackdaw would be in homes and businesses this month, but acknowledged it would not lower energy bills this winter. Instead she grounded her argument in energy security, saying the tax revenue generated would go into an Energy Wealth Fund to pay for low-carbon and renewable projects. Rosebank, she added, was a different proposition because its oil would be exported, but she would look at it.

Politically, Jackdaw is considerably easier for the government than Rosebank. Most Labour MPs are comfortable endorsing it, and the project is backed by the Conservatives and Reform, who argue a decision should have come much sooner, as well as by the SNP and the Liberal Democrats. The Green Party of England and Wales is opposed. On Rosebank the argument is far more contentious within Labour. Some who see the rationale for Jackdaw cannot see it for Rosebank; bluntly, it is a much more difficult decision, as Fahnbulleh has acknowledged. What can be expected in the coming hours and days is a resumption of all the arguments these projects have already provoked, with some insisting approval should have happened ages ago and others condemning the announcement as utterly irresponsible.