Trump welcomes Britain’s decision to approve new North Sea gas field

By Hanna Ziady, CNN

London (CNN) — US President Donald Trump has welcomed the UK government’s controversial decision to approve the development of a major new gas field in the North Sea that could begin production as soon as this month.

“The U.K. has started drilling in the North Sea, one of the greatest and most prosperous areas of OIL in the World. They should go FULL BLAST!!!,” Trump posted on Truth Social Wednesday.

The decision comes as the war in the Middle East has sent energy prices higher and deepened concerns about energy security globally. UK Prime Minister Andy Burnham described the decision as “pragmatic,” even as environmental groups criticized its climate change impact.

The UK’s announcement coincides with a new UN climate report that finds the globe will unavoidably overshoot the Paris Climate Agreement’s 1.5-degree Celsius warming target in the next few years, underscoring the rapidly growing effects of climate change.

The UK government said its decision to greenlight the Jackdaw gas field, located 150 miles east of Aberdeen in Scotland, was consistent with its legally binding commitment to lower carbon emissions and achieve net zero greenhouse gas emissions by the middle of this decade.

“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 our energy security, protecting hundreds of jobs and adding an estimated £2.9 billion ($3.8 billion) to the UK economy,” the government said in a statement Wednesday.

The Jackdaw gas field “will start to supply gas to British homes and businesses from as early as the end of this month,” the statement added.

At peak production, Jackdaw could produce enough gas to heat the equivalent of around 1.4 million UK homes, according to Adura, the Shell and Equinor joint venture developing the project.

The government also announced the creation of a new Energy Wealth Fund, which it said would use tax revenues from North Sea oil and gas to invest in renewable and low carbon energy projects. The fund will start with an initial cash injection of £2 billion ($2.7 billion).

Jackdaw to have limited impact on energy bills

The British government has faced criticism from some corners that its climate policies have hurt industry and energy security. Burnham said Wednesday that the government had taken a “pragmatic” approach to the North Sea.

“At a time when people are really struggling, it’s right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help,” he added.

In reality, however, greater North Sea oil and gas production is unlikely to materially boost energy supply or bring down prices.

“Jackdaw would reduce import dependence and improve supply resilience, but only to a limited extent,” said Sam Street, a director at consultancy Frontier Economics, who co-authored two recent reports into North Sea oil and gas production. “The UK would continue to rely on imports, including from Europe.”

More domestic production would also do little to bring down energy bills. “UK gas prices are closely linked to European prices, which are in turn influenced by the (global) cost of liquefied natural gas,” Street told CNN.

“Producing more gas domestically does not create a separate source of cheap energy for UK consumers,” he added. “Domestic producers have no reason to sell materially below the price they could achieve in European markets.”

Boost to jobs, tax revenue

On the positive side, Jackdaw is likely to generate additional tax revenues for the government and could also support economic activity and employment in the oil and gas supply chain, according to Street.

Two major UK trade unions, GMB and Unite, which have lobbied the government to move ahead with North Sea drilling, welcomed the decision in separate statements on Wednesday.

“Andy Burnham’s government deserves real credit for doing the right thing for our country,” GMB general secretary Gary Smith said, citing energy security.

Unite general secretary Sharon Graham said the decision would allow time to secure new jobs for North Sea workers. “Whilst we of course support net zero, we cannot have a jobless transition,” she added.

Rosebank oilfield up next

The UK government will now need to decide whether to approve the Rosebank oilfield, off the coast of Scotland’s Shetland Islands, which has estimated reserves of around 300 million barrels of oil.

The case for approval is “equally strong,” according to Neil McCulloch, the CEO of Adura.

But Jess Ralston, a senior energy analyst at Energy & Climate Intelligence Unit, a non profit focused on climate change, said that 90% of the oil and gas has already been drained from the North Sea basin. “The only way to long-term job security is to make the transition to offshore wind and other clean industries,” she added in a statement.

Environmental campaign group Uplift warned that new oil and gas fields are incompatible with safe climate limits. “The severe heatwaves, droughts, and wildfires impacting the UK this summer, as well as increasingly extreme weather around the world, demonstrate how rapidly climate risk escalates with every fraction of a degree,” Uplift said in a statement.

“It would be irresponsible in the extreme for the UK government to knowingly add to these impacts by sanctioning Rosebank.”

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