Miatta Fahnbulleh is minded to reject the giant Rosebank oilfield, sources have told the Guardian, in what would be a blow for the North Sea energy industry and a major victory for climate campaigners.
After approving the smaller Jackdaw gasfield on Wednesday, officials say the energy secretary is leaning towards refusing approval for what would be one of the biggest oilfields in the North Sea.
But she could still be overruled by Andy Burnham, who may hear different representations from the chancellor, John Healey. A final decision is expected before the end of this year.
In comments that will be read as a signal of her intent, Fahnbulleh told the Guardian that the rationale behind Jackdaw did not apply to Rosebank, saying the UK would rely on gas as it made the transition to net zero and that it would be better to take it from relatively low-carbon sources in the North Sea than importing it.
“One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export,” she said. “It is right that we judge each application in its own right, and it is absolutely critical that the decision is consistent with our climate obligations, our carbon budgets and the end destination we need to get to with the energy transition.”
In contrast, Healey told ITV he expected “oil and gas” revenues to contribute to a new energy wealth fund, a suggestion he is anticipating new oil revenues. Burnham would be expected to make the final call if there is conflict on the decision.
Labour MPs warned on Wednesday there would be a major pushback in the party if Rosebank was approved, though most are prepared to accept the arguments that Jackdaw was a necessity as part of the transition to net zero.
MPs are understood to have discussed ways of forcing or encouraging a parliamentary vote on Rosebank should it be approved, as a way of expressing dissent.
Officials say Fahnbulleh has not yet taken a final decision on Rosebank. The field would emit about seven times the carbon of Jackdaw and Fahnbulleh is understood to believe that it would do less for UK energy security, given most of the oil would be exported.
A spokesperson for the Department for Energy Security and Net Zero said: “This is speculation. As the energy secretary has said, each project will be assessed on its own merits.”
On a visit to Aberdeen, Fahnbulleh said she had been satisfied that Jackdaw, which is due to begin producing gas within weeks and will add an estimated 36m tonnes of carbon emissions, would not violate the UK’s climate commitments.
“As we make the transition, we are going to need gas,” she said. “At a point when we have got conflict in the Middle East that is triggering an energy crisis, energy security is vital, and homegrown energy is key.”
She admitted, however, it would not help achieve the government’s main energy target of bringing down bills, saying: “This is not about bills.”
The UN Environment Programme has recommended that global carbon emissions be cut by nearly a fifth in the next four years, and by close to half within a decade, to avoid overshooting climate targets by a disastrous margin.
The Jackdaw announcement could boost Labour’s position in north-east Scotland, where much of the industry is based and where unions have been campaigning heavily for the permits to be granted.
But it is likely to cause angst among some Labour MPs, especially those in seats where they face a challenge from the Green party.
One Labour MP close to the energy secretary said she knew her credibility was “on the line” and that she was able to show she was pragmatic by approving Jackdaw but drawing the line at Rosebank. “She’s putting up a fight and I want to be supportive of Miatta – I understand what she is fighting,” they said.
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But they said the decision would ultimately come down to Burnham. “Andy is not a climate guy – he is under pressure. If he wants to do it, he’ll do it.”
Several serving ministers have said they would find Rosebank a more difficult decision to back and it would cause greater problems in their constituencies.
The former minister Catherine West said climate change “is not a future threat but a present reality” and that the answer to job losses in the North Sea was not to “double down on new fossil fuel developments”.
Afzal Khan, the Labour MP for Manchester Rusholme and chair of the all-party parliamentary group on climate change, said: “Approving projects on the scale of Rosebank, on top of today’s decision to approve Jackdaw, cannot be justified.”
Burnham is seeking more ways to lower energy bills, telling MPs on Wednesday that ministers would consider whether standing charges could be removed from gas bills to ease cost pressures on households.
While Labour’s 2024 election manifesto committed to a ban on new drilling licences in the North Sea, the companies behind Jackdaw and Rosebank oilfield project have sought approval for existing licences.
The Greens said on Wednesday they intended to fight seats directly on the issue of Jackdaw and Rosebank. The Green MP Carla Denyer said: “We have identified dozens of seats where we are Labour’s main challenger and the climate is one of the top issues and voters have been mobilised by the heatwave and wildfires.
“Our strong advice to Labour MPs is to stand up to Andy Burnham and his act of climate violence, both to save your seats and, far more importantly, to protect the planet for future generations.”
Fahnbulleh has promised that future revenues from the North Sea will be spent on green energy projects through a new energy wealth fund. She said the fund would be given £2bn in the budget.
“When we have tax revenues that are coming from the oil and gas industry, it is right that we invest that in the transition we need to make in energy,” she said, adding that the money would be spent on renewables, nuclear and other clean energy schemes.
However, she could not say exactly which tax revenues would be given to the new fund, or how much that might generate. “The chancellor will make those details clear in the budget,” she said.
