The newly approved Rosebank Oil Project in the North Sea has sparked ferocious public debate – but how will it really impact gas prices, wildlife and the climate?
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The depths of the North Sea just beyond the Shetland Islands are home to a spectacular array of marine mammals. Porpoises, dolphins and the occasional orca cross through its choppy waters, and several baleen whale species travel there to fill up on krill.
They are also home to what this week has been the subject of serious controversy across the UK: the North Sea Rosebank field.
The site, situated 80 miles North-West of Shetland, is said to hold around 300 million barrels of oil 1,100 metres under the sea.
These will be the target of a major development by state-owned Norwegian oil giant Equinor, the Canadian private company Suncor and British Ithaca Energy, after the government green-lighted the area for oil production.
With 245 million barrels expected in the first five years of operation from 2026, the site is one of the biggest new oil fields in the UK for more than a decade.
That is despite the International Energy Agency’s assertion this week that the oil industry was approaching its peak and ‘no new oil projects are needed’ anywhere around the globe.
More than 50 MPs and political figureheads warned against the approval, and major campaigns by Surfers against Sewage and #StopRosebank have tried to slow its progress for months.
The news follows Prime Minister Rishi Sunak’s watering down of net zero policies last week, and his announcement that over a hundred new oil and gas exploration licences are planned for approval. To many campaigners, this decision feels like yet another nail in the coffin for the UK’s climate commitments.
Silje Ask Lundberg, North Sea Program Manager at Oil Change International, said: ‘The science could not be more clear: there is no room for a single drop of oil from new fields … This is proof positive the government is siding with oil and gas giants over a liveable future for all.’
The government cites energy security as the motivating factor for the project’s approval, but this was called into question during the backlash. So, what are the real impacts of the Rosebank oil project?
Will the oil and gas from Rosebank make a difference to the UK’s energy security?
Energy Security Minister Claire Coutinho claimed the project would give the UK ‘greater energy independence, making us more secure against tyrants like (Vladimir) Putin’, referring to the Kremlin’s fuel export ban.
In theory, Rosebank could help take pressure off oil markets by providing an alternative supply to Russia. But the plan has been criticised as short-sighted by campaigners.
Rosebank’s 300 million barrels are a drop in the ocean compared to the 11.3 million barrels exported by Russia on a daily basis. The supply is short-term and predicted to be depleted by 2040.
“Energy security for us is renewables,’ wildlife presenter Chris Packham argued on ITV’s Peston. ‘Putin can turn off the gas tap, but as far as I’m aware, he can’t turn off the wind.’
In practice, there is also no assurance that the fossil fuels from Rosebank will be used in this country. Comments from the Norwegian Equinor, who own the majority of the oil, have indicated all the oil pumped from the site will be put on the global market, where the UK will compete with other bidders for its use.
‘If the UK needs Rosebank oil, it will go to the UK through open market mechanisms’, said Arne Gurtner, Equinor’s senior vice president for the UK.
The UK will have to buy the oil at market price. And because the country has very few oil refining facilities, it will likely have to ship it elsewhere to be processed before the oil is usable. This means the new oil project will have very little impact on consumer oil prices.
It raises the question: who’s actually profiting from Rosebank?
Will Rosebank lead to greater financial stability for the UK?
Ithaca and Equinor suggested Rosebank will bring £8.1bn in direct investment to the UK economy. Supporters of the scheme have touted the benefits of income from tax on the sale of oil.
But because of a loophole in the windfall tax, that means for every £100 fossil fuel companies invest, they can claim £91.5 back from the treasury, the companies will benefit from a £3.75 billion tax break.
According to analysis by the climate group Uplift, the Exchequer would actually be set to make a loss of three-quarters of a billion pounds if the project goes ahead because of the discrepancy between the income from tax and the tax breaks.
Tessa Khan, executive director of Uplift, said: ‘This government seems determined to sell Britain short, while boosting the profits of obscenely wealthy foreign oil companies. Approving Rosebank will actually make Norway’s citizens richer as Equinor – which made £62 billion last year – is majority owned by the Norwegian government.’
Equinor owns 40 per cent of the oil site, with another 40 per cent owned by Suncar Energy. The 20 remaining per cent belong to Israeli-owned and UK-based Ithacar.
How will Rosebank impact the climate?
Green MP Caroline Lucas called out the decision as the ‘greatest act of environmental vandalism in my lifetime’.
The North Sea Transition Authority, who approved the project, claimed the decision was made while ‘taking net zero considerations into account throughout the project’s lifecycle.’
But estimations by Carbon Brief suggest that the CO2 emissions of the Rosebank project over the course of its lifespan would equal the annual emissions of around 90 countries and 400 million people.
And that is simply calculating the burning of the 300 million barrels of fossil fuels. The gas firms claim extraction will be less carbon intensive than traditional rigging as they plan to use floating vessels. But the construction and transportation of the oil and gas will add to the emissions tally.
Besides contributing directly to the planet’s warming by providing new fossil fuels to burn, there are fears Rosebank could present something of a Pandora’s Box.
The deep waters and rough conditions at the site, which sits in an ambiguous cartographic zone between the North Sea and the North Atlantic, mean conditions are challenging. Waves often reach 50-60 metres.
Deploying new technology to extract the oil there will provide a precedent encouraging further oil exploration.
And more oil fields is exactly what we need to avoid if we want any chance to limit warming to 1.5 degrees, according to the IPCC.
Will Rosebank impact marine life?
As well as the big-picture impact on the climate, the oil extraction in the North Sea poses some immediate risks to the wildlife surrounding it.
Equinor’s construction plans include drilling a total of twelve wells into the seabed, creating a gas pipeline from the site to the West of Shetlands and introducing a floating production storage facility.
In its environmental statement, the company admits that constructing the wells ‘have the potential to lead to changes in the seabed’. The damage includes a ‘direct loss of benthic species and habitat’ and ‘wider indirect disturbance’ to surrounding habitats.
The construction poses a risk to nearby coral and sponge growths and the species that rely on them as a habitat. The gas export pipeline will pass through the Faroe-Shetland Sponge belt, a unique habitat recognised as a ‘vulnerable marine ecosystem’.
Drilling can also create underwater noise pollution, which can negatively impact passing dolphins and whales.
And in the worst-case scenario, if any oil escapes from the drills or pipes, the impact on sea creatures can be lethal. Large amounts of oil have the potential to enter the lungs of dolphins and whales, causing them to suffocate. And even in small amounts, the oil can be diluted and carried vast distances in the ocean. Absorbed by flora and small marine creatures, which are at the bottom of the food chain, the pollutants can make their way through entire ecosystems.
Environmental groups and NGOs are resisting the government’s decision
Many charities and environmental campaigners are planning to take action against the government’s decision. Emergency rallies were called in Edinburgh and London yesterday, with more marches set to take place this weekend. Fossil Free London has called for the public to join
Some NGOs are gearing up to take the government to court, while others call the public to write to their local MPs and boycott the energy companies involved.
