The Jackdaw field development will start to supply gas to British homes and businesses from the end of this month, after the Energy Secretary agreed that the regulator can grant consent for gas to be produced at the field.
The government claim the Jackdaw decision is expected to increase domestic gas production by around 6% at its peak – supporting the UK’s gas supply over its lifespan of up to 11 years, boosting energy security, protecting hundreds of jobs and adding an estimated £2.9bn to the UK economy.
Recent events in the Middle East have triggered global energy shocks and at this time of global instability, homegrown energy has been identified as a source of national strength.
We’re committed to moving towards renewable energy and reaching net zero by 2050. But even on our ambitious climate path, we’ll still require oil and gas as part of our energy needs for decades to come. That’s why we’re taking a pragmatic approach to the North Sea. We’re also establishing a new Energy Wealth Fund to invest in renewable energy, support the green transition and help reduce energy bills over the long-term.
Andy Burnham, Prime Minister
The Chancellor has also announced the establishment of a new Energy Wealth Fund, which will use tax revenues from North Sea oil and gas to invest in renewable and low carbon energy projects and support the green transition.
The announcement comes ahead of next week’s Budget, which will set out the government’s plan to deliver good growth across the country. By reinvesting Britain’s energy wealth in renewable and low carbon energy infrastructure, the fund will aim to unlock investment, back the industries of the future and create skilled jobs across Scotland and the UK.
The government also claim that this investment in renewable energy will substantially delink gas and electricity by the end of this Parliament. By investing in and building more renewable and low carbon power, gas will set the price of electricity less often, helping end Britain’s exposure to volatile international gas markets and help get bills down for good in the long-term.
Energy Secretary Miatta Fahnbulleh said: “Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers.
“This decision will support the country’s energy security with homegrown gas this winter and help minimise the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear.”
Prime Minister Andy Burnham added: ” We’re committed to moving towards renewable energy and reaching net zero by 2050. But even on our ambitious climate path, we’ll still require oil and gas as part of our energy needs for decades to come. That’s why we’re taking a pragmatic approach to the North Sea. We’re also establishing a new Energy Wealth Fund to invest in renewable energy, support the green transition and help reduce energy bills over the long-term.”
Commenting on the news Make UK Chief Executive Stephen Phipson CBE said: “Yesterday after meeting the Chancellor, I said the government needs to start making tough decisions. This is a very good start.
“As we have previously said, approving the licensing of Jackdaw will boost the UK’s energy security and support manufacturers through volatile times. It will provide some much-needed certainty as we enter a challenging winter. That’s why we also support the government progressing Rosebank.
“We are also pleased with the creation of the new Energy Wealth Fund. This should be used to accelerate the transition to electrification and bring down energy costs in the long-term.
“All of this is a step in the right direction. But what our members really need is for the Chancellor to permanently reduce energy costs by removing policy levies from energy bills. “If the government is serious about reindustrialisation, then that needs to be the absolute priority at the Budget.”
A spokesperson for chemical manufacturer INEOS added: “Jackdaw approval is welcome, but the government must stop taxing the North Sea into decline.
“Approving Jackdaw is the right decision, but this does not stop the damage being done to the North Sea. And it appears Rosebank remains stuck in political limbo.
“The North Sea Levy must be amended in the Budget. This punitive tax has been an abject failure, even as a tax-raising mechanism. Tax receipts are going down, not up, while imports increase. The government is driving away the very investment that generates jobs, production and tax revenues. It makes no sense.
“Maintaining this punitive 78% tax in Budget will compound the mistake. It will leave an even bigger black hole in future Budgets.
“Britain will need oil and gas for decades. We can produce it here, creating British jobs and generating billions in tax revenues, or continue to increase imports from overseas and send those benefits abroad.
“There is still a chance in the upcoming budget to get back to a sensible energy policy and tax regime.”
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