A landmark UK Supreme Court ruling focused on downstream emissions has raised questions about its implications for the future of North Sea oil and gas drilling.
The case followed a decision by Surrey Council to extend drilling permission for an onshore oil well at Horse Hill, near Gatwick airport.
Campaigner Sarah Finch challenged the council’s approval, arguing the council should have to consider the emissions created from the oil’s end use, known as Scope 3 or ‘downstream’ emissions, not just those from the drilling and extraction itself.
In a three-to-two ruling, the Supreme Court decided in favour of Ms Finch and said the council decision to approve the oil well without consideration of Scope 3 emissions in its environmental impact assessment (EIA) was unlawful.
Environmental campaigners welcomed the ruling and said it could have implications for other legal challenges to the Jackdaw and Rosebank projects in the North Sea.
But how significant is the ruling and what does it mean for the future of oil and gas drilling in the North Sea?
North Sea drilling impacts
University of Aberdeen senior lecturer in energy law Dr Daria Shapovalova told Energy Voice the court ruling is likely to have implications beyond the UK.
“This is a landmark ruling by the Supreme Court establishing unequivocally that granting permission for [the] oil development was unlawful as the EIA failed to assess Scope 3 or downstream emissions resulting from combustion of the oil to be produced,” Dr Shapovalova said.
“It applied EU law and considered the recently decided case from Norway to arrive at its decision.
“The depth of the Court’s analysis means that it is likely to be followed by judges not only in the UK but in other jurisdictions too.”
© Supplied by TeekayDr Shapovalova said all future oil and gas projects in the UK will most likely need to include Scope 3 emissions in their environmental assessments, though the North Sea Transition Authority will still have the final decision-making power on approvals.
“However, this decision means that the regulator can make their determination with full knowledge of climate impacts,” she said.
“It further will provide for better public awareness of the full impacts of oil and gas production on climate.
“Ultimately, the regulator might want to take a proactive approach and update their regulations and guidance to effect this decision.”
Ruling will ‘further undermine investor confidence’
Robert Gordon University Energy Transition Institute director Professor Paul de Leeuw said the Supreme Court decision could “re-open the debate” about the validity of the UK’s current regulatory approval processes for fossil fuel projects.
“Although the court case wasn’t about if new oil and gas wells or projects should be progressed or not, the verdict is still highly significant [in terms of] how future planning applications should be assessed in terms of environmental impacts,” he said.
“It could also trigger a review of the suitability of the UK’s current Climate Compatibility Checkpoints and of the role of new domestic oil and gas production versus imports in our energy mix.
“While it will take some time to fully understand the implications of today’s Supreme Court decision, it is expected that this will add complexity to future investment decisions and will further undermine investor confidence in the UKCS.”
Jackdaw and Rosebank challenges
London School of Economics Grantham Research Institute policy analyst Tiffanie Chan said legal challenges to the Jackdaw and Rosebank developments in the North Sea “now have much stronger prospects of success”.
“The decision sets a precedent that planning permissions for oil and gas projects must give due consideration to their climate impacts,” Ms Chan said.
“This means that future approvals for new oil and gas projects are likely to face difficulties, as they must consider the emissions resulting from burning the field’s oil and gas.
© Shutterstock“This doesn’t mean that it is impossible for government decision-makers to approve new projects but it is likely to make it harder for them to justify doing so.”
Ms Chan said the court’s decision, which referenced a similar case in Norway, reflects a growing trend in climate litigation around the world.
“Courts are increasingly emphasising the responsibility of states to actively protect citizens from the impacts of climate change, and drawing the link between oil and gas projects and greenhouse gas emissions that harm future generations,” she said.
“Putting these two together, it is likely that we will continue to see climate litigation challenging government approvals of new fossil fuel projects.”
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