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By Jim Warren
Greenpeace and the UK environmental group Uplift won a court case in Scotland last month after claiming two new offshore oil projects were unlawfully approved.
The ruling blocks Equinor and Shell, from developing the Rosebank field 80 miles west of the Shetland Islands in the Atlantic and the Jackdaw field in the North Sea. Ironically, both oil companies have been active at the forefront of emissions reduction efforts and the green transition. If climate change alarmists have determined these two firms are insufficiently dedicated to protecting the environment, it is unlikely any major oil or gas company can ever satisfy the demands of Britain’s strident environmental activists.
Equinor ASA is one of Norway’s largest oil companies. The company is 67% government-owned and has been responsible for generating much of the revenue deposited into Norway’s $1.3 trillion USD sovereign wealth fund. Norway has been using earnings generated by the fund to massively finance some of the world’s most successful green transition initiatives.
The level of green transition support available thanks to the fund is evident in the Norwegian government’s lavish subsidization of electric vehicle purchases. In 2022, every citizen who purchased a new electric vehicle received a whopping $25,000 USD subsidy. Eighty percent of new vehicles sold in Norway in that year were either full electric or hybrids. Other green transition initiatives backed by the fund include Norway’s leadership in the purchase of carbon offset credits via the EU Emissions Trading System and major reforestation initiatives around the world.
Climate Change Performance Index, an organization that assesses the performance of countries for limiting greenhouse gas (GHG) emissions, renewable energy development and climate change policies ranks Norway as the world’s eighth most effective country in those three areas.
Shell, Equinor’s partner in the two new offshore oil fields has been active in emissions reduction in Canada for over a decade. Just this past July, Shell announced it had given the green light to two carbon capture and storage (CCS) projects. The new Polaris facility will be the second CCS operation at Shell’s Scotford, Alberta Energy and Chemicals Park. Shell’s Quest Carbon Capture and Storage facility, the first CCS plant the company constructed Scotford, was built in 2015 and has already captured more than nine million tonnes of CO2 emissions. The other new venture involves development of a CCS Hub in partnership with Alberta’s ATCO EnPower.
Nevertheless, there is no pleasing some people, the environmentally zealous in particular—they regularly sacrifice the good on behalf of the perfect. Asking an environmental fanatic if a government’s anti-oil and gas policies are too lax, is like asking a barber if you need a haircut.
Accordingly, Greenpeace and Uplift UK decided Shell and Equinor deserved having their wings clipped in court. Jobs lost to British workers certainly didn’t discourage the activist groups from filing suit. If the Scottish court ruling withstands appeal 4,000 new jobs will be lost on the Rosebank project with another 1,000 lost on the Jackdaw development.
Both the Jackdaw and Rosebank offshore projects were approved by Rishi Sunak’s Conservative government in 2022 and 2023 respectively. However, after the two projects were approved the UK Supreme Court ruled that before an oil well could be drilled near London’s Gatwick airport the proponents had to include downstream emissions in their environmental impact assessment. The environmentalists insist previously approved projects can be cancelled retroactively if they don’t meet the new criteria.
Equinor’s chief executive, Anders Opedal, says he’s confident both projects will survive the legal hiccup and be under development on schedule in 2026/27.
According to a BBC report, Shell and Equinor claim they provided regulators “with accurate environmental assessments in good faith under the law as it was understood” at the time their application was reviewed and approroved. Furthermore, “they were explicitly told by the regulator not to assess downstream emissions.” They argued they should not be “punished” retroactively for failing to meet conditions they could not have reasonably foreseen (i.e. the subsequent Gatwick ruling).
John MacGregor, legal counsel for Equinor, told the court in Edinburgh changing project approval rules and then retroactively canceling projects would discourage investors from backing developments in the UK. He said, “certainty and predictability are critical in highly-regulated industries–those making major investment decisions need to be able to ascertain the risk of proceeding.”
Proponents of cancelled pipelines in Canada could add an Amen to that.
Apparently both companies and the UK government now have the relevant downstream emissions data available. On that basis they want the judge, “to allow them to continue working towards starting production in the fields,” prior to the companies’ appeal being heard.
When Equinor’s Opedal met with reporters to discuss the Scottish court decision, he announced the company is planning to increase oil production while at the same time cutting expenditures on renewable energy projects by half over the next two years.
Opedal said “the transition to lower carbon energy was moving slower than expected, costs had increased, and customers were reluctant to commit to long-term contracts.”
Was including notice of cuts to its emissions reduction program a coincidence or was it an intentional swipe at green hypocrisy? It is satisfying to think Opedal was telling activists they might have won a couple battles in court but had damaged their campaign to jam a rushed and economically harmful green transition down people’s throats.
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