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North-east politicians and business groups have welcomed the decision by regulators to approve the new Rosebank development off the coast of Shetland.
While the government is scaling up homegrown clean energy sources such as offshore wind and nuclear, the UK still relies on oil and gas and this will continue to be the case over the coming decades.
As the government takes forward a ‘pragmatic’ response to the path to net zero, a key part of this will be maintaining domestic oil and gas industry which underpins our energy security and boosts the UK economy.
According to developer Equinor’s estimates, the Rosebank project represents a direct investment of approximately £8.1 billion, of which £6.3 billion is likely to be invested in UK-based businesses, with the developer also estimating that at its peak the field producing 69,000 barrels of oil and 44 million cubic feet of gas per day.
The Rosebank development – as well as other oil and gas projects – has been subject to extensive scrutiny by the regulators, including undergoing a detailed environmental impact assessment process and a period of public consultation before approval was granted.
All new projects, including Rosebank, will be in line with the natural decline of the North Sea basin.
In addition, the North Sea Transition Authority (NSTA) has net zero regulation embedded throughout the entire project lifecycle and considers several factors, sometimes collectively referred to as an ‘effective net zero test’, for decisions such as approving new field developments.
Energy Security Secretary Claire Coutinho said in response to the decision: “We are investing on our world-leading renewable energy but, as the independent Climate Change Committee recognise, we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank.
“The jobs and billions of pounds this is worth to our economy will enable us to have greater energy independence, making us more secure against tyrants like Putin.”
Andrew Bowie, West Aberdeenshire and Kincardine MP, said: “The regulator’s decision is a big step towards helping secure the UK’s domestic energy supply. It makes perfect sense for consumers facing high energy bills, the economy and our own journey towards net zero.
“The UK still relies heavily on imports of oil and gas rather than domestic production, resulting in higher emissions, less regulatory oversight, and the issue of where that supply comes from. Regardless of Rosebank, production is still declining quickly and the industry is moving towards renewable sources as fast as they can come online – hydrogen, wind, nuclear and carbon capture among them.
“So long as that domestic demand persists, we need to strike the right balance between fossil fuels and renewable energy sources. Decarbonisation must be a gradual shift. It will ensure secure, affordable, and eco-friendly industries which keep tens of thousands of people in highly-skilled work.
“Throwing North Sea production and all those jobs off a cliff edge is not the answer. Managing demand responsibly with domestic production, while moving towards net zero, is the way we keep imports down while forging a new future for the north-east as Europe’s energy capital.
Banff and Buchan MP David Duguid said: “The announcement is fantastic news and underlines the UK Government’s commitment to North Sea oil and gas production and its role in ensuring a successful energy transition.
“The approval of Rosebank will be welcomed by the industry at an uncertain time for its workforce as other political parties including the SNP and Labour want to recklessly turn the taps off in the North Sea at the earliest possible chance, not realising the damage this does to both our energy security and net zero objectives.
“There is an obvious advantage to having as much of our own domestic oil and gas as possible from fields like Rosebank which reduces our reliance on imports that would otherwise come at a far higher carbon cost.
“But this news also provides increased certainty that the skills we need to deliver the energy transition will be maintained in the short-term and transferred into renewable and low carbon energy sources in the longer term.
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “Rosebank will make an important contribution to UK and European energy security, create several hundred new jobs here in Scotland and result in over £6 billion being spent within the UK supply chain which is anchored in Aberdeen and Aberdeenshire.
“Crucially, while its approval will generate vast economic benefits, it will not increase the UK’s projected emissions.
“The announcement is a welcome shot in arm for the UK energy sector which will give investors, operators and the wider supply chain confidence as they strive to provide the power we need here and now and transition towards a net zero future.”
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